Jay Flynn: I just want to state the obvious, right, the recovery is taking a little longer than we had previously envisaged. And that’s down to what I would characterize as the impact of some decisions that we took to preserve the long term health of the business. So one of the things that we wanted to make sure that we really addressed head on was the business processes and the management processes that we have in place at Hindawi. So we have really tightened up our controls. We’ve installed a new management team and we put a team of research integrity experts in place, not just for Hindawi but across our entire research portfolio. This has had a dampening effect on article volume coming through Hindawi. As you know, I’m sure this is a model where it’s entirely volume driven.
And so when we look at those controls, we feel like that’s the right thing to do long term for the business. We also feel very much like the portfolio will benefit from being part of the larger Wiley publishing organization. And so we’ve taken steps to that effect over the last six months and really bringing editorial teams together, bringing marketing teams together, bringing our operations groups together to form a single journals group. And so those decisive steps together, I think, give me confidence in where we’re going to go with Hindawi. I also want to say that let’s just focus again on the couple of the key numbers. It’s about 10% of the total journal portfolio and about 5% of total research revenue. And so while we focus on it, I do think that where we’re going to wind up is something that’s more in line with overall research performance as it relates to gold open access.
So not as it relates to either Hindawi priors or to subscription revenue but as it relates to gold open access, which Christina characterized already. I’ll kind of leave it at that.
Christina Van Tassell: And then I’m just going to add just on the — looking at a long term horizon and the recovery, I think two things. One is we didn’t cut expenses in the near term in Hindawi because we’re so confident that it’s temporary we wanted to fuel the recovery. But in our long term, when we recover back to our long term volume, as Jay said, is a very volume driven business. we do see margins recover to 40-plus range. We did end [Indiscernible] integrity, which is what Jay was talking about as well but we do see a very healthy margin profile business coming back.
Matt Kissner: One last comment, Dan. There’s a market for gold up and access and there’s a market for what these journals do. And just not to put too finer point on it, but gold, it grows in the 20s, generally speaking, for the last few years and that’s sort of the profile that makes us continue to be excited about these terms.
Daniel Moore: It gives a little bit more context of where — kind of where you’re thinking right now. So I appreciate it. Shifting to the sale of University Services. I believe it’s calendar ’24? Is it Q1 when you likely expect to close? And maybe just talk about the conditions needed to achieve — to receive the first $110 million proceeds from the seller financing and then the additional $40 million earn-out. Is there a — obviously, I know you don’t want to get tied to a specific time frame, but just how should we be kind of framing or thinking about the timetable to actually achieving proceeds from that sale?
Christina Van Tassell: We are working to close early in the calendar of 24. And so as we noted and I think in our previous announcement we’ll have $110 million, do a close payable in either cash or a promissory note and that’s going to depend on the availability of proceeds from any third party debt financing from our buyer, which is America — Academic Partnerships. On the earnout, it’s a $40 million earnout and that’s achieved based on mutually freed revenue targets over the next two fiscals, so that’s May 1st of ‘24 through April 30th of ‘26 and then we also received 10% of the buyers’ equity as well.
Daniel Moore: Last for me, and I’ll jump out again. For a long time, the goal or part of the goal, it was always a balanced capital allocation, but was to take the exceptional or extraordinary cash flow generated from research and use it to grow in other areas. What is the plan for capital allocation going forward? Is it to growth dividend and buy back stock and invest to protect the core as the Board laid out or do you plan to pursue further M&A opportunities once the restructuring and divestments are complete?
Matt Kissner: I’ll begin and then ask Christina to comment. We are refocused on the core business here. Reflecting back, I think, would be probably — could have done more around our core business. There are opportunities that Jay is already uncovering as he’s running these two now unified business units. So anything we do will be focused around that core. And in terms of what we’re doing in terms of cash allocation, I’ll ask Christina to comment on that.
