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LAUREATE EDUCATION, INC. : Completion of Acquisition or Disposition of Assets, Change in Directors or Principal Officers, Financial Statements and Exhibits (form 8-K)

06/01/2021 | 04:19pm EDT

Item 2.01. Completion of Acquisition or Disposition of Assets.

On May 28, 2021, Laureate Education, Inc., a Delaware public benefit corporation (the "Company"), completed the previously announced divestiture of its Brazil operations to Ânima Holding S.A., a Brazilian corporation (the "Purchaser").

Pursuant to the Transaction Agreement, dated October 30, 2020, by and among the Company, Laureate Netherlands Holding B.V., a Dutch Besloten Vennootschap and an indirect wholly owned subsidiary of the Company, ICE Inversiones Brazil, SL, a Spanish Sociedad Limitada Unipersonal and an indirect wholly owned subsidiary of the Company, Rede Internacional de Universidades Laureate Ltda., a Brazilian limited liability company and an indirect wholly owned subsidiary of the Company ("Rede"), the Purchaser, VC Network Educação S.A., a Brazilian corporation and a wholly owned subsidiary of the Purchaser, and, solely for the purposes of certain provisions thereof, the Purchaser's controlling shareholders, the Company sold to the Purchaser all of the issued and outstanding equity interests of Rede, the direct or indirect owner of the Company's Brazilian operations. The Brazilian operations are referred to below as "Laureate Brazil."

The total cash consideration received was approximately $650 million, net of estimated transaction fees and the settlement of BRL-to-USD foreign currency swaps related to the transaction. In addition, the Purchaser assumed net indebtedness of approximately $103 million at the date of closing. On May 4, 2021, the Company redeemed $500 million aggregate principal amount of its 8.250% Senior Notes due 2025 (the "Senior Notes"). Following that redemption, the remaining outstanding principal amount of the Senior Notes was $298.7 million, which the Company intends to repay using a portion of the net proceeds from the divestiture of Laureate Brazil.

The consummation of the sale transaction constituted a significant disposition for purposes of Item 2.01 of Form 8-K. Accordingly, the pro forma financial information required by Item 9.01 is included at the end of this Current Report on Form 8-K.

Forward-Looking Statements

This Current Report on Form 8-K may include certain disclosures which contain "forward-looking statements" within the meaning of the federal securities laws, which involve risks and uncertainties. You can identify forward-looking statements because they contain words such as "believes," "expects," "may," "will," "should," "seeks," "approximately," "intends," "plans," "estimates" or "anticipates" or similar expressions that concern our strategy, plans or intentions. Forward-looking statements are based on the Company's current expectations and assumptions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from our expectations are disclosed in our Annual Report on Form 10-K filed with the SEC on February 25, 2021, our Quarterly Reports on Form 10-Q filed and to be filed with the SEC and other filings made with the SEC.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Chief Operating Officer Appointment

On May 26, 2021, Marcelo B. Cardoso was appointed as the Company's Chief Operating Officer, effective on the closing date of the sale of Laureate Brazil, which occurred on May 28, 2021. Mr. Cardoso, 49, has been with the Company since 2011, most recently serving as the Chief Executive Officer of Laureate Brazil since 2019. Prior to then, he served as the Company's Chief Transformation Officer and held several leadership positions across Laureate Brazil, including Chief Operating Officer, Brazil and Vice President, Business Development and M&A. Before joining the Company, Mr. Cardoso served as Latin America Vice President, Business Ops & CFO for Dell EMC Computer Systems and held senior leadership positions at Johnson Controls. Mr. Cardoso earned an undergraduate degree in chemical engineering from Universidade Estadual de Campinas (Brazil) and an MBA in management from the University of Michigan.

As Chief Operating Officer, Mr. Cardoso will receive annual base cash compensation of R$1,900,000 (approximately US$368,000 at the current exchange rate) and will be eligible to earn an annual target cash bonus equal to 100% of his annual base cash compensation pursuant to the terms of the Company's annual incentive plan, which bonus will be prorated in 2021 for the time spent in each position held during such year. Additionally, Mr. Cardoso's annual target long-term equity incentive award was increased to 150% of his annual base cash compensation. Consequently, on May 28, 2021, in connection with his appointment, Mr. Cardoso was granted, subject to the terms and conditions of the Company's Amended and Restated 2013 Long-Term Incentive Plan: (i) 7,785 restricted stock units that vest in three equal installments on each of December 31, 2021, December 31, 2022, and December 31, 2023 and (ii) 7,785 performance share units, of which two thirds vest based upon the achievement of performance goals for each of 2021 and 2022 and one third vests on March 15, 2024. Further, Mr. Cardoso was awarded a special one-time discretionary cash bonus of US$350,000 in recognition of his significant contributions to the sale process for Laureate Brazil, with such amount subject to repayment in full to the Company if Mr. Cardoso terminates his relationship with the Company before May 28, 2022. In addition, similar to other executive officers of the Company, Mr. Cardoso is eligible to receive severance and equity acceleration benefits as a participant in the strategic review retention bonus program, which benefits have been previously disclosed.



Named Executive Officer Retention Agreement

In connection with a retention agreement entered into on June 1, 2021, Paula Singer, CEO, Walden and Laureate Online Partners, is eligible for a transaction bonus equal to $172,125 if the previously disclosed sale of Walden University to Adtalem Global Education Inc. pursuant to the Membership Interest Purchase Agreement dated September 11, 2020 closes after July 31, 2021. Ms. Singer's entitlement to the transaction bonus is contingent upon her continued employment through the closing date of such transaction.

Item 9.01 Financial Statements and Exhibits.

(b) Pro Forma Financial Information.

The following financial information is included at the end of this Current Report on Form 8-K and is filed herewith and incorporated herein by reference:

•Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2021. •Unaudited Pro Forma Condensed Consolidated Statements of Operations for the year ended December 31, 2020 and the three months ended March 31, 2021.

© Edgar Online, source Glimpses

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