Item 1.01. Entry Into a Material Definitive Agreement.
Acquisition of ProQuest
On May 15, 2021, Clarivate Plc ("Clarivate" or the "Company") entered into an
agreement (the "Transaction Agreement") to acquire ProQuest, a leading global
software, data and analytics provider to academic, research and national
institutions, from Cambridge Information Group ("CIG"), Atairos and certain
other equityholders (the "Seller Group") for approximately $4.0 billion in cash,
including the refinancing of approximately $1.0 billion of ProQuest debt, and
46,910,922 Clarivate ordinary shares, representing approximately 7% pro
formafully diluted ownership of Clarivate. Clarivate has obtained a $4.0 billion
unsecured bridge facility to provide certainty of funds in respect of the cash
component of the consideration, and intends to raise long-term capital prior to
the closing of the transaction. A copy of the Transaction Agreement is attached
hereto as Exhibit 2.1 and incorporated by reference herein, and the foregoing
description is qualified in its entirety by reference thereto.
Closing of the ProQuest transaction is subject to customary conditions,
including clearance under the Hart-Scott-Rodino Antitrust Improvements Act of
1976. Closing is expected to occur in the third quarter of 2021.
At closing, Andrew M. Snyder, Chairman and CEO of CIG, and Michael J. Angelakis,
Chairman and CEO of Atairos, will be appointed to the Clarivate board of
directors. Mr. Snyder will serve as Vice Chairman of the board.
Also at closing, Clarivate will enter into an amendment to its existing
Registration Rights Agreement in order to provide the Seller Group with rights
to require Clarivate to register their ordinary shares for resale under the
Securities Act of 1933, as amended (the "Securities Act"). Under the terms of
the amendment, the Seller Group will agree not to dispose of their Clarivate
ordinary shares until the first anniversary of the closing date, subject to
certain adjustments and exceptions, and CIG will further agree to extend these
lock-up restrictions to half of its Clarivate ordinary shares until the second
anniversary of the closing date. The form of amendment to the Registration
Rights Agreement is attached hereto as Exhibit 10.1 and incorporated by
reference herein, and the foregoing description is qualified in its entirety by
reference thereto.
Forward-Looking Statements
This report contains "forward-looking statements" as defined in the Private
Securities Litigation Reform Act of 1995. Forward-looking statements are neither
historical facts nor assurances of future performance. Instead, they are based
only on management's current beliefs, expectations, and assumptions regarding
our ability to close the ProQuest transaction and to obtain permanent financing
in connection therewith, and to realize the expected synergies of the
transaction, as well as the future of our business, future plans and strategies,
projections, anticipated events and trends, the economy, and other future
conditions. Because forward-looking statements relate to the future, they are
difficult to predict and many are outside of our control. Important factors that
could cause our actual results and financial condition to differ materially from
those indicated in the forward-looking statements are discussed under the
caption "Risk Factors" in Amendment No. 1 to our 2020 Annual Report on Form
10-K, along with our other filings with the Securities and Exchange Commission
("SEC"). However, those factors should not be considered to be a complete
statement of all potential risks and uncertainties. Additional risks and
uncertainties not known to us or that we currently deem immaterial may also
impair our business operations. Forward-looking statements are based only on
information currently available to our management and speak only as of the date
of this report. We do not assume any obligation to publicly provide revisions or
updates to any forward-looking statements, whether as a result of new
information, future developments or otherwise, should circumstances change,
except as otherwise required by securities and other applicable laws. Please
consult our public filings with the SEC or our website at www.clarivate.com.
Item 3.02. Unregistered Sales of Equity Securities.
ProQuest Transaction Consideration
The information set forth under Item 1.01 is incorporated herein by reference.
The ordinary shares to be issued by Clarivate to the Seller Group pursuant to
the Transaction Agreement will be exempt from the registration requirements of
the Securities Act under Section 4(a)(2) thereof.
Capri Restructuring
On May 15, 2021, Clarivate entered into an agreement with Capri Acquisition
Topco Limited ("Capri") and Solaro ExchangeCo Limited ("NewCo"), and for certain
limited purposes, Leonard Green & Partners, L.P. ("LGP"). Capri and NewCo are
controlled by LGP and hold the Clarivate ordinary shares beneficially owned by
LGP and certain other existing shareholders. Under the agreement, Capri will
contribute 177,206,779 of its Clarivate ordinary shares to NewCo. Clarivate will
then acquire NewCo in exchange for the issuance of the same number of Clarivate
ordinary shares to Capri. This transaction will not involve any change in
beneficial ownership of Clarivate's ordinary shares. The issuance of the new
ordinary shares to Capri will be exempt from the registration requirements of
the Securities Act under Section 4(a)(2) thereof. Pursuant to authority granted
to Clarivate by shareholders at its 2021 Annual General Meeting, following its
acquisition of Newco, Clarivate intends to purchase the ordinary shares held by
Newco for a nominal price and then cancel such shares. A copy of the agreement
is attached hereto as Exhibit 10.2 and incorporated by reference herein, and the
foregoing description is qualified in its entirety by reference thereto.
Item 7.01. Regulation FD Disclosure.
A copy of Clarivate's press release dated May 17, 2021 announcing the ProQuest
transaction is furnished as Exhibit 99.1 hereto. The Company also publicly
reaffirmed its 2021 outlook for adjusted revenues, adjusted EBITDA, adjusted
EBITDA margin, adjusted diluted EPS and adjusted free cash flow, excluding the
ProQuest transaction. Clarivate will be delivering the investor presentation
attached hereto as Exhibit 99.2 on the conference call referred to in the press
release.
The information in this Item 7.01, including Exhibits 99.1 and 99.2 furnished
herewith, is being furnished and shall not be deemed "filed" for the purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or otherwise subject to the liabilities of that Section, and shall not be
incorporated by reference into any registration statement or other document
pursuant to the Securities Act or the Exchange Act, except as otherwise
expressly stated in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
No. Description
2.1† ProQuest Transaction Agreement
10.1 Form of Amendment No. 1 to the Registration Rights Agreement
10.2 Capri Transaction Agreement
99.1 Press Release dated May 17, 2021
99.2 Supplemental Information dated May 17, 2021
104 Cover page of this Current Report on Form 8-K formatted in Inline XBRL
† Schedules and exhibits omitted pursuant to Item 601(a)(5) of Regulation S-K.
Copies of any omitted schedule or exhibit will be furnished to the Securities
and Exchange Commission upon request.
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