false000073046400007304642020-04-242020-04-24

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 24, 2020

Adtalem Global Education Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-13988	36-3150143
(State of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

500 West Monroe
Chicago, Illinois		60661
(Address of principal executive offices)		(Zip Code)

(866) 374-2678

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock $0.01 Par Value		ATGE		NYSE, CSE

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Introduction

As previously disclosed in the Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) by Adtalem Global Education Inc. (“Adtalem”) on October 23, 2019, Adtalem is party to a Stock Purchase Agreement, dated as of October 18, 2019 (the “Agreement”), by and among Adtalem, Global Education International B.V. (“Global Education”), Estácio Participações S.A. (“Estácio”) and Sociedade de Ensino Superior Estácio de Sá. Ltda. (the “Purchaser”).

Item 2.01. Completion of Acquisition or Disposition of Assets.

On April 24, 2020, and under the terms of the Agreement (as amended by a Letter Agreement, dated as of April 24, 2020 (the “Letter Agreement”), by and among Adtalem, Global Education, Estácio and the Purchaser), Global Education sold all of the issued and outstanding shares of Adtalem Brasil Holding S.A. to Purchaser for cash (such sale, the “Transaction”). The purchase price paid by Purchaser at the closing of the Transaction consisted of R$2.206 billion, subject to certain post-closing adjustments pursuant to the Agreement. As a result, Global Education no longer owns any voting or economic interest in Adtalem Brasil Holding S.A.

The description of the Transaction set forth above does not purport to be complete and is qualified in its entirety by reference to the Agreement filed as Exhibit 2.1 hereto and the Letter Agreement filed as Exhibit 2.2 hereto, which are incorporated in this Item 2.01 by reference.

Item 7.01. Regulation FD Disclosure.

On April 27, 2020, Adtalem issued a press release announcing the closing of the Transaction. A copy of the press release is furnished as Exhibit 99.1 hereto. Such press release shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section. The information in this Item 7.01, including Exhibit 99.1, shall not be deemed incorporated by reference in any filing of Adtalem under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(b) Pro Forma Financial Information.

The following unaudited pro forma financial information of Adtalem is filed as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference:

• Unaudited pro forma consolidated balance sheet as of December 31, 2019.

• Unaudited pro forma consolidated statements of earnings for the six months ended December 31, 2019 and each of the years ended June 30, 2019, 2018 and 2017.

• Notes to the unaudited pro forma consolidated financial statements.

(d) Exhibits.

The following is a list of the Exhibits filed with this report:

Exhibit No.	Description
2.1	Stock Purchase Agreement, by and among Global Education International B.V., Sociedade de Ensino Superior Estácio de Sá Ltda., Adtalem Global Education Inc., and Estácio Participações S.A., dated as of October 18, 2019 (incorporated by reference to Exhibit 2.1 to Adtalem’s Current Report on Form 8-K filed on October 23, 2019).
2.2	Letter Agreement, by and among Global Education International B.V., Sociedade de Ensino Superior Estácio de Sá Ltda., Adtalem Global Education Inc., and Estácio Participações S.A., dated as of April 24, 2020.
99.1	Press Release of Adtalem dated April 27, 2020
99.2	Adtalem Unaudited Pro Forma Consolidated Financial Statements

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ADTALEM GLOBAL EDUCATION INC.

Date: April 27, 2020	By:	/s/ Michael O. Randolfi
	Name:	Michael O. Randolfi
	Title:	Senior Vice President and Chief Financial Officer (Principal Financial Officer)

April 24, 2020

Sociedade de Ensino Superior Estaćio de Sá Ltda.
Av. das Americas, 4200, BL 05, 3rd floor
Rio de Janeiro/RJ, Brazil 22640-907
Attention: Maria Goldberg

E-mail: maria.goldberg@estacio.br

Ladies and Gentlemen:

Reference is hereby made to the Stock Purchase Agreement, dated as of October 18, 2019 (the “Purchase Agreement”), by and among Global Education International B.V., a private limited company (Besloten Vennootschap met beperkte aansprakelijkheid) formed under the laws of the Netherlands (“Seller”), Sociedade de Ensino Superior Estácio de Sá. Ltda., a limited liability company formed under the laws of Brazil (“Purchaser”), Adtalem Global Education Inc., a corporation formed under the laws of the State of Delaware (“Seller Guarantor”), and Estácio Participações S.A., a company formed under the laws of Brazil (“Purchaser Guarantor”). Capitalized terms used but not defined in this letter agreement (this “Letter Agreement”) shall have the meanings assigned to such terms in the Purchase Agreement and the Seller Disclosure Letter.

Due to the closure of the São Paulo Board of Trade (“BoT”) as a result of the current COVID-19 pandemic, the ability of the Parties to make various filings and recordings with the BoT has been disrupted. For this and other reasons, the Parties wish to make certain amendments to the Purchase Agreement. For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller, Purchaser, Seller Guarantor and Purchaser Guarantor hereby agree to amend the Purchase Agreement and the Seller Disclosure Letter as follows:

1.	Section 1.1(z) of the Purchase Agreement. Section 1.1(z) is hereby replaced in its entirety with the following:

(z) “Indemnified Taxes” shall mean, without duplication, (i) any Taxes arising from or relating to the settlement, repayment, capitalization, retirement, cancellation or other form of elimination of any Related Party Loans, (ii) any withholding Taxes imposed on any payment made by Purchaser pursuant to this Agreement, including for the avoidance of doubt, any interest or penalties thereon, (iii) any Taxes, including withholding taxes, arising from, on or relating to Seller’s Capital Gain Amount, and (iv) all amounts payable by Purchaser and its Affiliates in connection with the Preemptive Lawsuit, including all reasonable attorneys’ fees and expenses and costs of the proceedings. For the avoidance of doubt, the Taxes referenced in sub-clauses (ii) and (iii) do not include the Brazilian Tax on Financial Transactions (Imposto sobre operações financeiras – IOF);

2.	Section 1.2(c) of the Purchase Agreement. Section 1.2(c) of the Purchase Agreement is hereby amended and restated as follows:

(c) references to “Reais” or “R$” are references to the lawful currency of Brazil and references to “U.S. dollars” or “$” are references to the lawful currency of the United States;

3.	Section 4.2(e) of the Purchase Agreement. Section 4.2(e) of the Purchase Agreement shall be replaced in its entirety with the following:

(e) deliver to Purchaser reasonable evidence of Seller’s compliance with Section 7.4(a) and Section 7.4(b) (Termination of Agreements).

4.	Section 4.2(h) of the Purchase Agreement. The following is hereby added at the end of Section 4.2 of the Purchase Agreement:

(h) deliver to Purchaser, in original and not a copy, the power of attorney in the form attached hereto as Exhibit F, duly executed, notarized and with apostille affixed (the “BoT Registration Power of Attorney”).

5.	Section 4.4 of the Purchase Agreement.

Pursuant to Section 4.4 of the Purchase Agreement (as amended in clause (b) below) Seller hereby designates:

the bank account set forth on Exhibit A-1 attached hereto for payment of the Closing Purchase Price and any Final Overage; and

ii.

unless otherwise designated by Seller at least five (5) Business Days prior to the relevant payment date, the bank account set forth on Exhibit A-2 attached hereto for payment of any amounts due to Seller under Section 7.18(d) of the Purchase Agreement and any payments made to Seller set forth on Schedule 1.1(jjj).

Section 4.4 of the Purchase Agreement is hereby amended and restated as follows:

Section 4.4 Payment Mechanics.

(a) Any payment to be made pursuant to this Agreement by Purchaser to Seller shall be made to the bank account or accounts designated by Seller in writing to Purchaser at least five (5) Business Days prior to the due date for payment. Any payment to be made pursuant to this Agreement by Seller to Purchaser shall be made to the bank account nominated by Purchaser in writing to Seller at least three (3) Business Days prior to the due date for payment. Unless otherwise agreed in writing by Seller and Purchaser, any payments under this Agreement shall be in immediately available funds. All payments shall be made by electronic transfer on the due date for payment and receipt of the amount due shall be an effective discharge of the relevant payment obligation. If the payment is to a bank account or accounts in Brazil, no conversion into U.S. dollars shall be required. If the payment is to a bank account or accounts outside of Brazil, the funds in Reais shall be converted into U.S. dollars. For the avoidance of doubt, if Seller designates a bank account or accounts outside of Brazil for payment of any amounts owed by Purchaser under this Agreement, including the Closing Purchase Price, the Final Overage (if any), and any payments made to Seller set forth on Schedule 1.1(jjj), Purchaser shall bear any Brazilian Tax on financial transactions (imposto sobre operações financeiras - IOF) related to any foreign exchange transaction required to covert Reais into U.S. dollars. Specifically for the purpose of the conversion of the Closing Purchase Price, any Final Overage, and any payments made to Seller set forth on Schedule 1.1(jjj) from Reais into U.S. dollars in connection with its transfer to a bank account or accounts outside of Brazil, Purchaser agrees and undertakes to (i) negotiate the relevant conversion rate (the “Conversion Rate”) in good faith and in accordance with market practices with Morgan Stanley Capital Services LLC, with whom Purchaser has a bank account (or such other bank as Seller and Purchaser shall mutually agree, the “FX Bank”) in consultation with Seller and (ii) involve Seller in all discussions with the FX Bank in connection with the Conversion Rate, including the confirmation of the Conversion Rate with the FX Bank on the first (1st) Business Day prior to the relevant date for payment.

(b) In connection with any foreign exchange transaction between Purchaser and the FX Bank for the conversion of the Closing Purchase Price, any Final Overage, and any payments made to Seller set forth on Schedule 1.1(jjj) into U.S. dollars:

(i) Purchaser shall not be liable for any and all consideration due to the FX Bank used for the conversion of any amounts in Reais into U.S. dollars that are not included in the Conversion Rate (other than any Brazilian Tax on financial transactions (imposto sobre operações financeiras - IOF)) and, therefore, under no circumstance shall Purchaser be required to pay any fee or amount of any nature whatsoever (other than any Brazilian Tax on financial transactions (imposto sobre operações financeiras - IOF)) to the FX Bank;

(ii) in no event shall Purchaser be required to gross up or otherwise pay Seller any amounts in connection with the conversion into U.S. dollars of any amounts denominated in Reais in this Agreement;

(iii) Seller shall undertake the indemnity obligations set forth in the Letter Agreement, dated April 20, 2020, by and among Banco Morgan Stanley S.A., Purchaser, and Seller, a copy of which is attached as Exhibit B hereto, directly with the FX Bank and no obligation of such nature shall be imposed on or required from Purchaser; and

(iv) Purchaser's obligations under this Agreement with respect to payment shall be deemed satisfied in full upon (x) transfer of the applicable amount in Reais to the account designated by the FX Bank and (y) delivery of an instruction to the FX Bank to transfer the U.S. dollar equivalent of such amount at the Conversion Rate to the bank account designed by Seller in accordance with Section 4.4(a);

provided, however, that, notwithstanding anything herein to the contrary, Seller will not be liable for any Brazilian Tax on financial transactions (imposto sobre operações financeiras - IOF) related to such foreign exchange transaction, which shall be borne by Purchaser.

6.	Section 4.5(b) of the Purchase Agreement. The following is hereby added at the end of Section 4.5(b):

The Parties acknowledge and agree that, notwithstanding anything set forth in this Agreement, (x) the rights of the Purchaser Indemnified Parties to indemnification under Section 10.2(e) shall include the right to indemnification for Losses resulting from any challenge by a Tax Authority of or any other dispute with a Tax Authority related to the Seller’s Capital Gain Amount, including a challenge based on the lack of registration of the Corporate Documents (as such term is defined in Section 7.4(c) hereof) at Closing, and (y) such indemnification shall not be negated or otherwise limited by the failure to register the Corporate Documents or any omission from or action taken by or at the direction of Purchaser in furtherance of registering the Corporate Documents. For the avoidance of doubt, the Parties also agree that the Purchaser’s Indemnified Parties Losses will not include the amount actually withheld by Purchaser at the Closing with respect to the Seller’s Capital Gain Amount pursuant to this Section 4.5(b) in order to avoid double counting such amount.

7.	Section 7.4 of the Purchase Agreement. The following is hereby added at the end of Section 7.4 of the Purchase Agreement.

(c)

Until such date as the Board of Trade (Junta Comercial) shall have registered (a) the Minutes of Extraordinary General Shareholders Meetings of the Company that approves (x) a capital increase of the Company in the amount of R$1,208,160,000.00, by means of the issuance of 602,634,357 common shares, subscribed and paid-in by Seller with the transfer to the Company of 89,558,873 Quotas Class B issued by Adtalem Educacional do Brasil Ltda. and (y) a capital increase of the Company in the amount of R$781,890,084.14, by means of the issuance of 390,009,459 common shares, subscribed and paid-in by Seller with the capitalization of accumulated profits of the Company (the “Capitalization Corporate Act”) and (b) the Minutes of the Extraordinary General Shareholders Meeting of the Company that approves the extinguishment of the board of directors of the Company and the transformation of the Company into a Brazilian limited liability company (sociedade limitada), (the documents described in sub-clauses (a) and (b), the “Corporate Documents”), Seller shall and shall cause its Affiliates to:

(i) maintain the full legal effect in all respects of (x) the power of attorney and amendment thereto copies of which have been attached hereto as Exhibit E; provided that Seller shall have the right to replace such power of attorney with a new power of attorney substantially in the same form as Exhibit E, appointing new individuals to represent Seller; provided further that, notwithstanding Seller's right to replace such power of attorney, at all times a power of attorney in the form attached here to as Exhibit E shall be in full legal effect (the “Foreign Company Power of Attorney”) and (y) the BoT Registration Power of Attorney, in each case as valid and legal powers of attorney in accordance with its terms and applicable Law;

(ii) refrain from taking or permitting any action, directly or indirectly, that results in the termination of the corporate existence of Seller, including any dissolution, winding-up, liquidation or similar act of Seller, or in any way limits the validity or legality of the Foreign Company Power of Attorney or the BoT Registration Power of Attorney; and

(iii) use reasonable best efforts to take all required measures to obtain the registration of the Corporate Documents with the Board of Trade, using reasonable best efforts to execute and file any amended Corporate Documents or other documents requested by the Board of Trade (the “BoT Required Amendments”) within five (5) calendar days (and in any event within ten (10) calendar days; provided that this does not prevent Seller from filing documents after such 10-day period) of the date such request is issued by the Board of Trade, which amendments shall be restricted to the fulfilment of requirements of the Board of Trade and with no deviation to the step plan outlined in Schedule 7.4(b). The amended versions of the Corporate Documents shall be provided to Purchaser for its review and comment, and Seller shall consider in good faith reasonable comments provided by Purchaser. Purchaser shall cooperate with Seller in order to fulfill any of the BoT Required Amendments in furtherance of the registration of the Corporate Documents, including by executing (or causing the Company to execute) and providing any additional documents or forms necessary for such registration.

(d)

From and after the Closing Date and until such date as the Board of Trade (Junta Comercial) shall have registered the Corporate Documents and the Amendment to the Articles of Association of the Company dated as of the Closing Date that transfers the Company’s Transferred Shares from Seller to Purchaser, approves the replacement of its officers and removes “Adtalem” from the Company’s corporate name (such amendment, the “Amended AoA”), Seller covenants and agrees to: (i) maintain the full legal effect in all respects of the Foreign Company Power of Attorney and the BoT Registration Power of Attorney as valid and legal powers of attorney in accordance with their terms and applicable Law; (ii) refrain from taking or permitting any action, directly or indirectly, that results in the termination of the corporate existence of Seller, including any dissolution, winding-up, liquidation or similar act of Seller, or in any way limits the validity or legality of the Foreign Company Power of Attorney or the BoT Registration Power of Attorney; (iii) not make any other filings with the Board of Trade with respect to the Corporate Documents or Amended AoA; and (iv) not place an Encumbrance on the Transferred Shares and, to the extent an Encumbrance of a third party creditor of Seller or its Affiliates is attempted or actually placed on the Transferred Shares, use reasonable best efforts to prevent or remove such Encumbrance from the Transferred Shares as promptly as practicable and at its sole cost and expense.

(e)

(i) Purchaser may only use the Foreign Company Power of Attorney or BoT Registration Power of Attorney for the registration of the Corporate Documents with the Board of Trade and the BoT Required Amendments in accordance with the terms of this Agreement and any amendments to the Corporate Documents shall be restricted to the fulfillment of the requirements of the Board of Trade and with no deviation to the step plan outlined in Schedule 7.4(b), (ii) Purchaser will not use the Foreign Company Power of Attorney or BoT Registration Power of Attorney within the ten (10) calendar day period following any requirements from the Board of Trade so that Seller may fulfill the requirements of Section 7.4(c)(iii), and (iii) after such ten (10) calendar day period, Purchaser shall notify Seller in writing as promptly as practicable before using the BoT Registration Power of Attorney and Foreign Company Power of Attorney and shall send Seller drafts of any and all documents that Purchaser plans to execute using the Foreign Company Power of Attorney or BoT Registration Power of Attorney and shall consider in good faith Seller’s reasonable comments to such documents. Purchaser and the Target Companies shall allow Seller to sign any amendments to the Corporate Documents required to comply with the requirements from the Board of Trade. Notwithstanding the foregoing, nothing herein shall restrict Purchaser’s ability to file the Amended AoA or any further amendments thereto at any time from and after the Closing Date; provided that Purchaser may not take any actions which would restrict, impair or delay Seller from amending the Corporate Documents to comply with the requirements of the Board of Trade or otherwise restrict, impair or delay the registration of the Amended AoA with the Board of Trade.

(f)

In the event that Seller does not, for any reason register the Capitalization Corporate Act with the Board of Trade or make any BoT Required Amendments with respect thereto within the thirty (30)-day period set forth in the applicable Law to ensure that the effects of the Capitalization Corporate Act have retroactive effect to its execution date prior to the Closing, Purchaser, upon at least five (5) Business Days prior written notice to Seller, may file a preemptive judicial lawsuit against the Brazilian Tax Authority to dispute the amount of Taxes due with respect to the Seller’s Capital Gain Amount arising from the transactions contemplated by this Agreement (the “Preemptive Lawsuit”). Purchaser shall control the Preemptive Lawsuit, including the selection of counsel and strategy, and will consider in good faith all reasonable comments made by Seller with respect thereto. Any and all Losses of the Company and Purchaser in connection with the Preemptive Lawsuit shall be indemnifiable Losses under Section 10.2(e) and Seller shall provide any and all guarantees, judicial deposits or similar amounts required by the Brazilian Tax Authority and/or the competent judicial branch in connection therewith. Purchaser shall keep Seller reasonably informed of all material communications, permit Seller to participate in all meetings, teleconferences and proceedings with the Brazilian Tax Authority and/or the competent judges regarding the Preemptive Lawsuit and consider in good faith all reasonable comments made by Seller with respect thereto. Seller shall take all actions reasonably necessary to comply with all legal requirements in connection with the Preemptive Lawsuit and will have the right, but not the obligation to, join as a party to such proceeding. Seller shall be entitled to participate in the defense of the Preemptive Lawsuit and to employ separate counsel of its choice for such purpose, at its sole cost and expense. Purchaser shall not settle the Preemptive Lawsuit without Seller’s prior written consent which shall not be unreasonably withheld, conditioned or delayed. For the avoidance of doubt, the Preemptive Lawsuit shall not comprise any voluntary disclosure (“denúncia espontânea”) of tax debts and nothing in this Agreement could be construed in order to authorize Purchaser to make any voluntary disclosure (“denúncia espontânea”) of tax debts

8.	Section and Schedule 7.18(d) of the Purchase Agreement.

Section 7.18(d) of the Purchase Agreement is hereby amended and restated as follows:

(d) Purchaser shall pay to Seller, five (5) business days after the date of the expiration of the last Services Period, the aggregate amount of the fees set forth on Schedule 7.18 calculated on a pro rata basis for the actual number of days in the Services Period for the Services provided with respect to each License, plus with respect to any License terminated early pursuant to Section 7.18(c), any costs or expenses incurred by Seller in connection with any such early termination (e.g., any fees owed to third parties for the time period prior to such early termination and the six (6)-month period following the Closing Date for such early-terminated License). Any payment set forth in this section shall be made in immediately available funds in U.S. dollars. Any payment set forth in this section shall be added of any Taxes levied upon the payment in Brazil, as to neutralize any Brazilian Tax effects incurred by the Seller in receiving the relevant payment, so that the Seller receives precisely the amount due after said taxation. For the avoidance of doubt, Seller must specify a U.S. bank account for such payments and Purchaser shall be responsible for paying any Brazilian Tax on financial transactions (imposto sobre operações financeiras - IOF).

Schedule 7.18 of the Purchase Agreement is hereby amended and restated as set forth on Exhibit C attached hereto.

9.	Section 10.2 of the Purchase Agreement.

Section 10.2(d) of the Purchase Agreement shall be replaced in its entirety with the following:

(d) the third party claims described on Schedule 10.2(d).

The following is hereby added at the end of Section 10.2 of the Purchase Agreement:

(g) any Third Party Claims arising out of, resulting from, in connection with or relating to the lack of registry of the Corporate Documents with the Board of Trade (Junta Comercial), including any Encumbrances on the Transferred Shares as a result of the lack of such registration; provided that any such Third Party Claims concerning Indemnified Taxes shall be governed by Section 10.2(e).

10.	Section 11.5 of the Purchase Agreement. Purchaser’s information in Section 11.5 is hereby replaced in its entirety with the following:

If to Purchaser:

Sociedade de Ensino Superior Estácio de Sá Ltda.
Av. das Americas, 4200, BL 05, 3rd floor,
Rio de Janeiro/RJ, Brazil 22640-907
Attention: Eduardo Parente / Maria Goldberg
E-mail: eduardo.parente@estacio.br / maria.goldberg@estacio.br

Copy to (which shall not constitute notice):

Baker & McKenzie LLP.
452 Fifth Avenue
New York, New York 10018
Attention: Alan F. Zoccolillo, Esq.
E-mail: Alan.Zoccolillo@bakermckenzie.com

Lobo De Rizzo Advogados
Av. Brigadeiro Faria Lima, 3900, 12º andar,
04538-132 São Paulo, SP.
Attention: Rodrigo Millar de Castro Guerra
E-mail: rodrigo.guerra@ldr.com.br

11.

Transaction Expenses. Schedule 1.1(jjj) of the Purchase Agreement is hereby amended and restated as set forth on Exhibit D attached hereto. Notwithstanding anything in the Purchase Agreement to the contrary, the Parties agree that, to the extent that any of the change of control payments listed on Schedule 1.1(jjj) of the Purchase Agreement are to become due and payable following the Closing upon satisfaction of post-Closing vesting conditions (the “Post-Closing Change of Control Payments”), the Post-Closing Change of Control Payments (together with the employer portion of any related employment and payroll Taxes) shall also be considered Transaction Expenses in determining the Closing Purchase Price pursuant to Section 3.2 of the Purchase Agreement and adjustments to the Closing Purchase Price (i.e., the Final Purchase Price) pursuant to Section 3.3 of the Purchase Agreement. If any portion of the Post-Closing Change of Control Payments is no longer payable (or is otherwise not paid) by the Target Companies (due to forfeiture or otherwise) after the Closing pursuant to the terms of the relevant retention agreement (any such amount, a “Forfeited Amount”), then Purchaser shall pay the relevant Forfeited Amount (together with the employer portion of any related employment and payroll Taxes) to Seller within ten (10) Business Days following the date on which such Forfeited Amount is no longer payable (or is otherwise not paid) by the Target Companies (due to forfeiture or otherwise) pursuant to the terms of the relevant retention agreement; provided that Purchaser shall not be required to pay the relevant Forfeited Amount (together with the employer portion of any related employment and payroll Taxes) to Seller unless such amount is in fact included as a Transaction Expense in the calculation of the Closing Purchase Price and any adjustments thereto. For the avoidance of doubt, such Post-Closing Change of Control Payments shall not be indemnifiable by Seller under Section 10.2(c) of the Purchase Agreement and any Forfeited Amount payable by Purchaser to Seller shall be considered as an adjustment to the Final Purchase Price.

12.	Section 5.30 of the Seller Disclosure Letter. Section 5.30 of the Seller Disclosure Letter is hereby amended and restated as set forth on Exhibit E attached hereto.

13.	Exhibit D to the Purchase Agreement. Exhibit F hereto is hereby added as Exhibit D to the Purchase Agreement.

14.	Exhibit E to the Purchase Agreement. Exhibit G hereto is hereby added as Exhibit E to the Purchase Agreement.

Except as otherwise expressly provided herein, all of the terms and conditions of the Purchase Agreement shall remain unchanged and continue in full force and effect. This Letter Agreement shall not be deemed to be an amendment to any other term or condition of the Purchase Agreement, the Seller Disclosure Letter or any of the documents referred to therein. This Letter Agreement shall be deemed to be in full force and effect from and after the execution of this Letter Agreement by the parties hereto as if the amendments made hereby were originally set forth in the Purchase Agreement or the Seller Disclosure Letter. From and after the execution of this Letter Agreement by the parties hereto, any reference to the Purchase Agreement or the Seller Disclosure Letter shall be deemed to be a reference to the Purchase Agreement or the Seller Disclosure, as applicable, as amended by this Letter Agreement.

The terms of Section 1.2 (Interpretation) and Article XI (Miscellaneous) of the Purchase Agreement are hereby incorporated herein by reference, mutatis mutandis, as if set forth herein and shall apply to this Letter Agreement. Any conflict arising between this Letter Agreement and the Purchase Agreement shall be resolved in favor of the terms and intent of this Letter Agreement.

[Signature Page Follows]

	Very truly yours,


	GLOBAL EDUCATION INTERNATIONAL B.V.:


	By:
		Name: Michael O. Randolfi
		Title: Director A


	By:
		Name: Intertrust (Netherlands) B.V.
		Title: Director B






	ADTALEM GLOBAL EDUCATION INC.:


	By:
		Name: Stephen W. Beard
		Title: Chief Operating Officer

cc:	Attention:	Paul T. Schnell, via email: Paul.Schnell@skadden.com;
		Filipe B. Areno, via email: Filipe.Areno@skadden.com;
		Thomas W. Greenberg, via e-mail: thomas.greenberg@skadden.com;
		Francisco Antunes Maciel Müssnich., via e-mail: famm@bmalaw.com.br;
		Luis Loria Flaks, via e-mail: lflaks@bmalaw.com.br

[Signature Page to Letter Agreement]

	Agreed and accepted as of the date first written above:

	SOCIEDADE DE ENSINO SUPERIOR ESTÁCIO DE SÁ LTDA.


	By:
	Name:
	Title:


	By:
	Name:
	Title:



	ESTÁCIO PARTICIPAÇÕES S.A.


	By:
	Name:
	Title:


	By:
	Name:
	Title:

cc:	Attention:	Alan F. Zoccolillo, Esq., via email: Alan.Zoccolillo@bakermckenzie.com;
		Rodrigo Millar de Castro Guerra, via email: rodrigo.guerra@ldr.com.br

[Signature Page to Letter Agreement]

Adtalem Global Education Completes Sale of Adtalem Educacional do Brasil to YDUQS

CHICAGO--(BUSINESS WIRE)--April 27, 2020--Adtalem Global Education (NYSE: ATGE), a leading workforce solutions provider, today announced that it has completed the sale of Adtalem Educacional do Brasil to YDUQS, the second largest education company in Brazil.

“This is a critical inflection point for Adtalem as we advance our strategy to be a leading workforce solutions provider, enabling us to serve our markets in a more competitive and comprehensive way,” said Lisa Wardell, Adtalem chairman and CEO. “While we are operating in a time of unprecedented uncertainty, our portfolio, coupled with our online learning capabilities, ensures we are able to continue to address the global workforce skills gap in Medical and Healthcare and Financial Services, while unlocking significant shareholder value in the process. Our strong liquidity position is bolstered by the proceeds of this transaction, enabling us to navigate the current uncertain economic environment and invest in long-term growth.”

On April 24, 2020, pursuant to the terms of the Purchase Agreement, Adtalem Global Education sold all of the issued and outstanding shares of Adtalem Brasil Holding S.A. to YDUQS for cash. Net proceeds from the transaction total $424 million, which includes a $94 million gain from Adtalem’s currency hedging arrangement. The transaction is subject to certain post-closing adjustments set forth in the Purchase Agreement.

As previously disclosed, in fiscal year 2019, Adtalem’s Brazil assets contributed $225.8 million in revenue and $17.5 million in operating income.

About YDUQS

YDUQS (B3: YDUQ3) is a leading Brazilian educational group focused on transforming lives through higher education. With 576,000 students across all Brazilian states, YDUQS is a pioneer in online learning and a leader in high-quality programs with its Medical and Law Schools. In 2019, revenues reached 3.6 billion reais ($893 million).

About Adtalem Global Education

The purpose of Adtalem Global Education is to empower students to achieve their goals, find success, and make inspiring contributions to our global community. Adtalem Global Education Inc. (NYSE: ATGE; member S&P MidCap 400 Index) is a leading workforce solutions provider and the parent organization of American University of the Caribbean School of Medicine, Association of Certified Anti-Money Laundering Specialists, Becker Professional Education, Chamberlain University, EduPristine, OnCourse Learning, Ross University School of Medicine and Ross University School of Veterinary Medicine. For more information, please visit adtalem.com and follow us on Twitter (@adtalemglobal) and LinkedIn.

Contacts

Media Contact:
John Kristoff
john.kristoff@adtalem.com
312-651-1437

Investor Contact:
Maureen Resac
maureen.resac@adtalem.com
312-651-1481

Pro Forma Financial Information

The following supplemental pro forma information is presented for information purposes only, to provide an understanding of Adtalem’s historical financial results as adjusted for the sale of Adtalem Brazil. These pro forma financial statements should not be considered a substitute for the actual historical financial information prepared in accordance with generally accepted accounting principles, as presented in Adtalem’s filings on Form 10-K and Form 10-Q. The unaudited pro forma consolidated financial information disclosed in this report is for illustrative purposes only and is not necessarily indicative of results of operations that would have been achieved had the pro forma events taken place on the dates indicated, or our future consolidated results of operations.

The Pro Forma Consolidated Balance Sheet as of December 31, 2019 presents our consolidated financial position giving pro forma effect to the disposition of Adtalem Brazil as if it had occurred on December 31, 2019. The Pro Forma Consolidated Statements of Income for the years ended June 30, 2019, 2018, and 2017, and the six months ended December 31, 2019 present our consolidated results of operations giving pro forma effect to the disposition of Adtalem Brazil as if it had occurred on July 1, 2016, July 1, 2017, July 1, 2018, and July 1, 2019, respectively. These pro forma financial statements should be read in connection with Adtalem’s historical consolidated financial statements, which were included in the Annual Report on Form 10-K for the year ended June 30, 2019, filed on August 28, 2019 and Quarterly Report on Form 10-Q for the six months ended December 31, 2019, filed on February 4, 2020.

The pro forma adjustments are based on currently available information, estimates and assumptions that Adtalem believes are reasonable in order to reflect, on a pro forma basis, the impact of these dispositions on our historical information.

Adtalem Global Education Inc.

Pro Forma Consolidated Balance Sheet

(unaudited and amounts in thousands, except par value amounts)

	December 31, 2019
	Adtalem			Pro Forma				Adtalem
	Historical			Adjustments				Pro Forma
Assets:
Current assets:
Cash and cash equivalents	$	67,282		$	497,017		(a)	$	564,299
Investments in marketable securities		9,229			—				9,229
Restricted cash		3,465			—				3,465
Accounts receivable, net		93,394			—				93,394
Prepaid expenses and other current assets		45,275			—				45,275
Current assets held for sale		171,284			(171,284	)	(b)		—
Total current assets		389,929			325,733				715,662
Noncurrent assets:
Property and equipment, net		281,975			—				281,975
Operating lease assets		187,520			—				187,520
Deferred income taxes		15,588			—				15,588
Intangible assets, net		292,736			—				292,736
Goodwill		686,805			—				686,805
Other assets, net		82,850			—				82,850
Other assets held for sale		453,207			(453,207	)	(b)		—
Total noncurrent assets		2,000,681			(453,207	)			1,547,474
Total assets	$	2,390,610		$	(127,474	)		$	2,263,136

Liabilities and shareholders' equity:
Current liabilities:
Accounts payable	$	31,457		$	—			$	31,457
Accrued payroll and benefits		39,088			—				39,088
Accrued liabilities		89,507			(28,006	)	(c)		61,501
Deferred revenue		51,413			—				51,413
Current operating lease liabilities		53,029			—				53,029
Current portion of long-term debt		3,000			—				3,000
Current liabilities held for sale		36,694			(36,694	)	(b)		—
Total current liabilities		304,188			(64,700	)			239,488
Noncurrent liabilities:
Long-term debt		412,105			—				412,105
Long-term operating lease liabilities		180,002			—				180,002
Deferred income taxes		28,845			—				28,845
Other liabilities		91,643			—				91,643
Noncurrent liabilities held for sale		75,833			(75,833	)	(b)		—
Total noncurrent liabilities		788,428			(75,833	)			712,595
Total liabilities		1,092,616			(140,533	)			952,083
Redeemable noncontrolling interest		3,082			—				3,082
Shareholders' equity:
Common stock, $0.01 par value per share		806			—				806
Additional paid-in capital		496,674			—				496,674
Retained earnings		2,032,788			(143,569	)	(d)		1,889,219
Accumulated other comprehensive loss		(159,118	)		156,628		(e)		(2,490	)
Treasury stock, at Cost		(1,076,238	)		—				(1,076,238	)
Total shareholders' equity		1,294,912			13,059				1,307,971
Total liabilities and shareholders' equity	$	2,390,610		$	(127,474	)		$	2,263,136

Notes to December 31, 2019 Pro Forma Consolidated Balance Sheet

(a)	Represents net proceeds received upon sale close of $424.0 million, in addition to $73.0 million in settlement of net cash balances.

(b)	Represents the elimination of the assets and liabilities associated with the business disposition. As of December 31, 2019, Adtalem Brazil assets and liabilities were classified as held for sale on Adtalem’s Consolidated Balance Sheet in the Form 10-Q filed on February 4, 2020.

(c)	Represents the removal of the deal-contingent hedge fair value liability.

(d)

Represents the estimated loss on the sale of Adtalem Brazil had the transaction closed on December 31, 2019. This amount is subject to finalization. This estimated loss is not included in the adjustments in the pro forma consolidated statement of income, as this amount will be included as discontinued operations in the consolidated statement of income of Adtalem following the disposition.

(e)	Represents the release of accumulated other comprehensive loss associated with Adtalem Brazil into earnings.

Adtalem Global Education Inc.

Pro Forma Consolidated Statement of Income

(unaudited and amounts in thousands, except per share amounts)

	Six Months Ended December 31, 2019
	Adtalem			Pro Forma				Adtalem
	Historical			Adjustments ^(a)				Pro Forma
Revenue	$	520,785		$	—			$	520,785
Operating cost and expense:
Cost of educational services		255,292			—				255,292
Student services and administrative expense		195,735			—				195,735
Restructuring expense		8,485			—				8,485
Gain on sale of assets		(4,779	)		—				(4,779	)
Total operating cost and expense		454,733			—				454,733
Operating income from continuing operations		66,052			—				66,052
Other income (expense):
Interest and dividend income		1,893			—				1,893
Interest expense		(10,394	)		—				(10,394	)
Investment gain		442			—				442
Loss on derivative		(28,006	)		28,006		(b)		—
Net other expense		(36,065	)		28,006				(8,059	)
Income from continuing operations before income taxes		29,987			28,006				57,993
Income tax provision		(11,276	)		—				(11,276	)
Income from continuing operations		18,711			28,006				46,717
Discontinued operations:
Income (loss) from discontinued operations before income taxes		411			(10,216	)			(9,805	)
Income tax benefit		550			1,833				2,383
Income (loss) from discontinued operations		961			(8,383	)			(7,422	)
Net income		19,672			19,623				39,295
Net loss attributable to redeemable noncontrolling interest from continuing operations		214			—				214
Net income attributable to Adtalem Global Education	$	19,886		$	19,623			$	39,509

Amounts attributable to Adtalem Global Education:
Net income from continuing operations	$	18,925		$	28,006			$	46,931
Net income (loss) from discontinued operations		961			(8,383	)			(7,422	)
Net income attributable to Adtalem Global Education	$	19,886		$	19,623			$	39,509

Earnings (loss) per share attributable to Adtalem Global Education:
Basic:
Continuing operations	$	0.35		$	0.51			$	0.86
Discontinued operations	$	0.02		$	(0.15	)		$	(0.14	)
Net	$	0.36		$	0.36			$	0.72
Diluted:
Continuing operations	$	0.34		$	0.51			$	0.85
Discontinued operations	$	0.02		$	(0.15	)		$	(0.13	)
Net	$	0.36		$	0.36			$	0.72

Weighted-average shares outstanding:
Basic shares		54,691			54,691				54,691
Diluted shares		55,192			55,192				55,192

Notes to December 31, 2019 Pro Forma Consolidated Statement of Income

(a)	Represents the elimination of the operating results associated with the Adtalem Brazil business disposition. As of December 31, 2019, Adtalem Brazil operating results were classified as discontinued operations in Adtalem’s Consolidated Statement of Income in the Form 10-Q filed on February 4, 2020.

(b)

Adtalem entered into a deal-contingent foreign currency hedge arrangement to economically hedge the Brazilian Real denominated sales price through mitigation of the currency exchange rate risk. The derivative associated with the hedge agreement does not qualify for hedge accounting treatment under Accounting Standards Codification (“ASC”) 815, and as a result, all changes in fair value are recorded within the income statement. Adtalem recorded a pre-tax unrealized loss on the hedge agreement derivative based on the foreign exchange forward spot rate as of December 31, 2019 of $28.0 million in the second quarter of fiscal year 2020.

Adtalem Global Education Inc.

Pro Forma Consolidated Statement of Income

(unaudited and amounts in thousands, except per share amounts)

	Year Ended June 30, 2019
	Adtalem			Pro Forma			Adtalem
	Historical			Adjustments ^(a)			Pro Forma
Revenue	$	1,239,687		$	(225,844	)	$	1,013,843
Operating cost and expense:
Cost of educational services		623,540			(151,758	)		471,782
Student services and administrative expense		400,411			(41,069	)		359,342
Restructuring expense		55,925			(2,858	)		53,067
Settlement gains		(26,178	)		—			(26,178	)
Total operating cost and expense		1,053,698			(195,685	)		858,013
Operating income from continuing operations		185,989			(30,159	)		155,830
Other income (expense):
Interest and dividend income		7,976			(4,008	)		3,968
Interest expense		(23,631	)		3,733			(19,898	)
Investment loss		(153	)		—			(153	)
Net other expense		(15,808	)		(275	)		(16,083	)
Income from continuing operations before income taxes		170,181			(30,434	)		139,747
Income tax provision		(34,157	)		1,279			(32,878	)
Income from continuing operations		136,024			(29,155	)		106,869
Discontinued operations:
Income from discontinued operations before income taxes		(14,630	)		—			(14,630	)
Loss on disposal of discontinued operations before income taxes		(33,604	)		—			(33,604	)
Income tax benefit		7,791			—			7,791
Loss from discontinued operations		(40,443	)		—			(40,443	)
Net income		95,581			(29,155	)		66,426
Net (income) loss attributable to redeemable noncontrolling interest		(413	)		791			378
Net income attributable to Adtalem Global Education	$	95,168		$	(28,364	)	$	66,804

Amounts attributable to Adtalem Global Education:
Net income from continuing operations	$	135,611		$	(28,364	)	$	107,247
Net loss from discontinued operations		(40,443	)		—			(40,443	)
Net income attributable to Adtalem Global Education	$	95,168		$	(28,364	)	$	66,804

Earnings (loss) per share attributable to Adtalem Global Education:
Basic:
Continuing operations	$	2.32		$	(0.48	)	$	1.83
Discontinued operations	$	(0.69	)	$	—		$	(0.69	)
Net	$	1.63		$	(0.48	)	$	1.14
Diluted:
Continuing operations	$	2.29		$	(0.48	)	$	1.81
Discontinued operations	$	(0.68	)	$	—		$	(0.68	)
Net	$	1.60		$	(0.48	)	$	1.13

Weighted-average shares outstanding:
Basic shares		58,540			58,540			58,540
Diluted shares		59,330			59,330			59,330

Notes to June 30, 2019 Pro Forma Consolidated Statement of Income

(a)	Represents the elimination of the operating results associated with the Adtalem Brazil business disposition.

Adtalem Global Education Inc.

Pro Forma Consolidated Statement of Income

(unaudited and amounts in thousands, except per share amounts)

	Year Ended June 30, 2018
	Adtalem			Pro Forma			Adtalem
	Historical			Adjustments ^(a)			Pro Forma
Revenue	$	1,231,211		$	(270,934	)	$	960,277
Operating cost and expense:
Cost of educational services		645,604			(184,047	)		461,557
Student services and administrative expense		373,064			(45,357	)		327,707
Restructuring expense		5,067			(1,216	)		3,851
Total operating cost and expense		1,023,735			(230,620	)		793,115
Operating income from continuing operations		207,476			(40,314	)		167,162
Other income (expense):
Interest and dividend income		5,827			(5,229	)		598
Interest expense		(14,620	)		3,039			(11,581	)
Net other expense		(8,793	)		(2,190	)		(10,983	)
Income from continuing operations before income taxes		198,683			(42,504	)		156,179
Income tax provision		(84,102	)		(4,005	)		(88,107	)
Equity method investment loss		(138	)		—			(138	)
Income from continuing operations		114,443			(46,509	)		67,934
Discontinued operations:
Loss from discontinued operations before income taxes		(124,162	)		—			(124,162	)
Income tax benefit		44,016			—			44,016
Loss from discontinued operations		(80,146	)		—			(80,146	)
Net income (loss)		34,297			(46,509	)		(12,212	)
Net (income) loss attributable to redeemable noncontrolling interest		(528	)		1,023			495
Net income (loss) attributable to Adtalem Global Education	$	33,769		$	(45,486	)	$	(11,717	)

Amounts attributable to Adtalem Global Education:
Net income from continuing operations	$	113,915		$	(45,486	)	$	68,429
Net loss from discontinued operations		(80,146	)		—			(80,146	)
Net income attributable to Adtalem Global Education	$	33,769		$	(45,486	)	$	(11,717	)

Earnings (loss) per share attributable to Adtalem Global Education:
Basic:
Continuing operations	$	1.85		$	(0.74	)	$	1.11
Discontinued operations	$	(1.30	)	$	—		$	(1.30	)
Net	$	0.55		$	(0.74	)	$	(0.19	)
Diluted:
Continuing operations	$	1.83		$	(0.73	)	$	1.10
Discontinued operations	$	(1.29	)	$	—		$	(1.29	)
Net	$	0.54		$	(0.73	)	$	(0.19	)

Weighted-average shares outstanding:
Basic shares		61,462			61,462			61,462
Diluted shares		62,280			62,280			62,280

Notes to June 30, 2018 Pro Forma Consolidated Statement of Income

(a)	Represents the elimination of the operating results associated with the Adtalem Brazil business disposition.

Adtalem Global Education Inc.

Pro Forma Consolidated Statement of Income

(unaudited and amounts in thousands, except per share amounts)

	Year Ended June 30, 2017
	Adtalem			Pro Forma			Adtalem
	Historical			Adjustments ^(a)			Pro Forma
Revenue	$	1,207,909		$	(276,340	)	$	931,569
Operating cost and expense:
Cost of educational services		638,245			(189,469	)		448,776
Student services and administrative expense		369,043			(39,159	)		329,884
Restructuring expense		12,973			—			12,973
Regulatory settlements		52,150			—			52,150
Total operating cost and expense		1,072,411			(228,628	)		843,783
Operating income from continuing operations		135,498			(47,712	)		87,786
Other income (expense):
Interest and dividend income		4,905			(4,733	)		172
Interest expense		(9,144	)		2,250			(6,894	)
Net other expense		(4,239	)		(2,483	)		(6,722	)
Income from continuing operations before income taxes		131,259			(50,195	)		81,064
Income tax provision		(9,594	)		6,612			(2,982	)
Equity method investment loss		(694	)		—			(694	)
Income from continuing operations		120,971			(43,583	)		77,388
Discontinued operations:
Income from discontinued operations before income taxes		3,135			—			3,135
Income tax provision		(826	)		—			(826	)
Income from discontinued operations		2,309			—			2,309
Net income		123,280			(43,583	)		79,697
Net income attributable to redeemable noncontrolling interest		(997	)		997			—
Net income attributable to Adtalem Global Education	$	122,283		$	(42,586	)	$	79,697

Amounts attributable to Adtalem Global Education:
Net income from continuing operations	$	119,974		$	(42,586	)	$	77,388
Net income from discontinued operations		2,309			—			2,309
Net income attributable to Adtalem Global Education	$	122,283		$	(42,586	)	$	79,697

Earnings (loss) per share attributable to Adtalem Global Education:
Basic:
Continuing operations	$	1.89		$	(0.67	)	$	1.22
Discontinued operations	$	0.04		$	—		$	0.04
Net	$	1.93		$	(0.67	)	$	1.26
Diluted:
Continuing operations	$	1.87		$	(0.67	)	$	1.21
Discontinued operations	$	0.04		$	—		$	0.04
Net	$	1.91		$	(0.67	)	$	1.24

Weighted-average shares outstanding:
Basic shares		63,499			63,499			63,499
Diluted shares		64,019			64,019			64,019

Notes to June 30, 2017 Pro Forma Consolidated Statement of Income

(a)	Represents the elimination of the operating results associated with the Adtalem Brazil business disposition.