NEW YORK, Jan. 14, 2019 /PRNewswire/ -- Churchill
Capital Corp ("Churchill") (NYSE: CCC), a public investment
vehicle, and Clarivate Analytics ("Clarivate"), a global leader in
providing trusted insights and analytics to accelerate the pace of
innovation, announced they have entered into a definitive agreement
to merge. The combined company will operate as Clarivate and will
become publicly listed on the New York Stock Exchange. The
transaction implies an initial enterprise value of approximately
$4.2 billion1 with a
multiple of approximately 12.5x Clarivate's estimated 2019
Standalone Adjusted EBITDA before synergies at the time of
close.
Churchill CEO Jerre Stead, who
had a long and very successful tenure serving as Chairman and CEO
at IHS Markit Ltd. and previously as Executive Chairman and CEO at
IHS Inc., will serve as Executive Chairman of the combined company.
Clarivate's existing management team, led by CEO Jay Nadler and CFO Richard Hanks, will continue to lead the
business.
Clarivate provides comprehensive intellectual property and
scientific information, decision support tools and services that
enable academia, corporations, governments, and the legal
community, to discover, protect and commercialize new ideas,
mission-critical content, and brands. Clarivate's many well‐known
brands include Web of Science™, Cortellis™, Derwent Innovation™,
Derwent World Patents Index™, CompuMark™, MarkMonitor®, and
Techstreet™, among others. Funds affiliated with Onex
Corporation ("Onex") (TSX: ONEX) and Baring Private Equity Asia
("BPEA") acquired Clarivate in a carve-out transaction from Thomson
Reuters in 2016. Since the acquisition, Clarivate has continued to
capitalize on its unique legacy and assets while separating from
its former parent and positioning the business for success as a
standalone entity, which included recruiting a new management team
and re-energizing its products and commercial capabilities.
As the business completes its multi-year separation from Thomson
Reuters this year, it is well positioned for accelerated
growth.
"We have respected Clarivate for a long time and are very
pleased to now merge our companies. Clarivate has a superior
set of data assets, valuable customer relationships and
extraordinary people. I look forward to working with Clarivate's
management team to accelerate growth in organic revenue, EBITDA and
free cash flow over time," said Jerre
Stead, CEO of Churchill.
Jay Nadler, CEO of Clarivate,
explained: "Clarivate accelerates the pace of innovation by
supporting the world's innovators - the people and organizations
behind a new idea, invention or brand. This is an exciting
milestone in Clarivate's evolution that will open a wide range of
future growth opportunities for the business and allow us to
further invest in the brightest minds, game changing data science,
and robust technologies. Jerre is a veteran of the industry
and his insights will be invaluable as we enter our next phase of
growth."
Summary of Transaction
Onex, BPEA and Clarivate
management are retaining 100% of their equity, which converts to
73.8% ownership of the outstanding shares of the combined company
at closing, assuming no redemptions by Churchill's public
stockholders. The remaining outstanding shares of the
combined company will be held by the current stockholders and
founders of Churchill. Onex will continue to be the majority
owner.
The transaction is expected to be completed during the second
quarter of 2019, subject to approval by Churchill stockholders and
other customary closing conditions. Clarivate will also enter into
a tax receivable agreement with its current equity holders, which
will provide for the sharing of tax benefits relating to certain
pre-business combination tax attributes as those tax benefits are
realized by Clarivate. Churchill and Clarivate intend to hold a
joint conference call providing further details on the transaction
on January 15, 2019 at 8:00 AM
ET; please see Exhibit 1 for dial-in details. The boards of
directors of both Churchill and Clarivate have unanimously approved
the proposed transaction. The combined company will apply to
list its ordinary shares and warrants on the New York Stock
Exchange.
In connection with the transaction, Churchill founders have
agreed to invest an additional $15
million, doubling their investment in Churchill.
Founders have also have entered into agreements to amend the terms
of its founder shares and founder warrants to align with the
long-term valuation creation and performance of Clarivate.
Churchill founders have delayed the majority of their equity to
vest only if the share price of the company exceeds $15.25 per share by 2022 and $17.50 per share by 2024. The majority of
net cash proceeds from this transaction are expected to be used to
pay down existing Clarivate debt and for working capital and
general corporate purposes.
Important Information for Churchill Investors and
Stockholders:
Churchill and Clarivate intend to file a proxy
statement, prospectus and other relevant documents with the
Securities and Exchange Commission ("SEC") to be used at
Churchill's annual meeting of stockholders to approve the proposed
transaction with Clarivate. The proxy statement will be mailed to
stockholders as of a record date to be established for voting on
the proposed business combination. Investors and security holders
of Churchill are urged to carefully and fully read the proxy
statement, prospectus and other relevant documents that will be
filed with the SEC as they will contain important information about
the proposed transaction and related parties. Free copies of these
documents will be available through SEC's website at
http://www.sec.gov. Documents filed by Churchill and/or
Clarivate can be obtained free of charge from Churchill's website
at www.churchillcapitalcorp.com, by written request to
Churchill Capital Corp, 640 Fifth Avenue, Floor 12, New York, NY 10019, or by emailing
info@churchillcapitalcorp.com.
Advisors
Citigroup Global Markets is acting as
capital markets advisor to Churchill. Citi and M. Klein and Company
served as financial advisors to Churchill. Blank Rome LLP and Paul,
Weiss, Rifkind, Wharton & Garrison served as legal counsel to
Churchill.
Credit Suisse served as exclusive financial advisor to
Clarivate, Onex and BPEA. Latham & Watkins LLP served as
legal counsel to Clarivate and Onex . BPEA was advised by
Ropes & Gray LLP.
About Clarivate Analytics
Clarivate is the global
leader in providing trusted insights and analytics to accelerate
the pace of innovation. The company offers subscription-based
services focused on scientific and academic research, life
sciences, patent research and intelligence, industry codes and
standards and intellectual property management. Building on a
heritage going back more than a century and a half, Clarivate has
built some of the most trusted brands across the innovation
lifecycle, including Web of Science, Cortellis, Derwent, CompuMark,
MarkMonitor and Techstreet. Formerly the Intellectual
Property and Science business of Thomson Reuters, today Clarivate
is on a bold entrepreneurial mission to help their customers
radically reduce the time from new ideas to life-changing
innovations. For more information, please visit Clarivate.com.
About Churchill Capital Corp
Churchill Capital Corp
is a public investment vehicle formed for the purpose of effecting
a merger, acquisition or similar business combination in the
information services segment of the broader technology services and
software industry. Churchill is led by Chairman Michael Klein and Chief Executive Officer
Jerre Stead. Churchill's securities
are quoted on the New York Stock Exchange under the ticker symbols
CCC, CCCW and CCCU. The company raised $690
million of cash proceeds in an initial public offering in
September 2018.
www.churchillcapitalcorp.com
Forward Looking Statements
This press release includes
"forward looking statements" within the meaning of the "safe
harbor" provisions of the United States Private Securities
Litigation Reform Act of 1995. When used in this press release, the
words "estimates," "projected," "expects," "anticipates,"
"forecasts," "plans," "intends," "believes," "seeks," "may,"
"will," "should," "future," "propose" and variations of these words
or similar expressions (or the negative versions of such words or
expressions) are intended to identify forward-looking statements.
These forward-looking statements are not guarantees of future
performance, conditions or results, and involve a number of
known and unknown risks, uncertainties, assumptions and other
important factors, many of which are outside Churchill's or
Clarivate's management's control, that could cause actual results
or outcomes to differ materially from those discussed in the
forward-looking statements. Important factors, among others, that
may affect actual results or outcomes include: the inability to
complete the transactions contemplated by the proposed business
combination; the inability to recognize the anticipated benefits of
the proposed business combination, which may be affected by, among
other things, the amount of cash available following any
redemptions by Churchill stockholders; the ability to meet NYSE's
listing standards following the consummation of the transactions
contemplated by the proposed business combination; costs related to
the proposed business combination; Clarivate's ability to execute
on its plans to develop and market new products and the timing of
these development programs; Clarivate's estimates of the size of
the markets for its solutions; the rate and degree of market
acceptance of Clarivate's solutions; the success of other competing
technologies that may become available; Clarivate's ability to
identify and integrate acquisitions; the performance and security
of Clarivate's services; potential litigation involving Churchill
or Clarivate; and general economic and market conditions impacting
demand for Clarivate's services. Other factors include the
possibility that the proposed transaction does not close, including
due to the failure to receive required security holder approvals,
or the failure of other closing conditions. Neither Churchill nor
Clarivate undertake any obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
Non-GAAP Financial Measures
Adjusted EBITDA represents
net income from continuing operations before provision for income
taxes, depreciation and amortization and interest income and
expense ("EBITDA") adjusted to exclude acquisition or
disposal-related transaction costs, losses on extinguishment of
debt, stock-based compensation, unrealized foreign currency gains /
(losses), transition services agreement costs, carveout and
integration costs, transformational and restructuring expenses,
acquisition-related adjustments to deferred revenue, non-cash
income / (loss) on equity and cost method investments,
non-operating income or expense, the impact of certain non-cash and
other items that are included in net income for the period that
Clarivate does not consider indicative of its ongoing operating
performance, and certain unusual items impacting results in a
particular period to more accurately reflect management's view of
the recurring profitability of the business. Standalone Adjusted
EBITDA is calculated using Adjusted EBITDA adjusted further to
include the difference between annualized run-rate savings and
savings realized during that same twelve-month period as well as
the difference in Clarivate's actual standalone costs incurred
relative to the steady state standalone cost estimate that
Clarivate expects to achieve after completing the carveout and
optimizing standalone functions by the end of 2020.
Additional Information
Churchill and Clarivate and
their respective directors and executive officers, under SEC rules,
may be deemed to be participants in the solicitation of proxies of
Churchill's stockholders in connection with the proposed
transaction. Investors and security holders may obtain more
detailed information regarding the names and interests in the
proposed transaction of Churchill's directors and officers in
Churchill's filings with the SEC, including Churchill's Form S-1
registration statement, which was declared effective by the SEC on
September 6, 2018. Information
regarding the persons who may, under SEC rules, be deemed
participants in the solicitation of proxies to Churchill's
stockholders in connection with the proposed business combination
will be set forth in the registration statement for the proposed
business combination when available. Additional information
regarding the interests of participants in the solicitation of
proxies in connection with the proposed business combination will
be included in the proxy statement, prospectus and related
documents that the parties intend to file with the SEC.
This press release is not a proxy statement or solicitation of a
proxy, consent or authorization with respect to any securities or
in respect of the proposed transaction and shall not constitute an
offer to sell or a solicitation of an offer to buy any securities,
nor shall there be any sale of any securities in any state or
jurisdiction in which such offer, solicitation, or sale would be
unlawful prior to registration or qualification under the
securities laws of such state or jurisdiction.
Contacts:
Churchill Capital Corp info@churchillcapitalcorp.com
Clarivate Analytics media.enquiries@clarivate.com
Exhibit 1
Conference Call and Webcast Information
Churchill and Clarivate executives will conduct a conference
call and webcast to discuss this news release on January 15, 2019 at 8:00
a.m. Eastern Daylight Time.
Webcast link:
https://event.webcasts.com/starthere.jsp?ei=1226721
Dial-in:
|
US
Toll-free:
|
(800)
562-8369
|
|
UK
Toll-free:
|
0800
279-6839
|
|
Conference ID:
8637311
|
|
An archived webcast will be available for one week following the
live call at
https://event.webcasts.com/starthere.jsp?ei=1226721
Participant Access - Dial in 5-10 minutes prior to the start
time
1 Based on Q3 2018 pro forma net debt of
approximately $1.3B, which includes
net proceeds from the sale of Clarivate's Intellectual Property
Management business and its acquisition of TrademarkVision, both
completed in Q4 2018.
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SOURCE Clarivate