Update: Churchill Capital Corp. (CCC) / Clarivate Analytics


Update: Churchill Capital Corp. (CCC) / Clarivate Analytics

Jan 15, 2019 INTEL by Kristi Marvin


UPDATE: The below section updates yesterday’s post based on recently filed information.

This morning, Churchill Capital held a conference call and webcast to discuss their recently announced merger with Clarivate Analytics.  Additionally, Churchill also released additional information regarding details of the transaction as well as filed a presentation.  Below is a summary of today’s new information:

  • The number of Ordinary Shares issued to the Clarivate Owners increases by 1 Ordinary Share for every $10 of transaction-related expenses incurred by Churchill in excess of an agreed amount.
  • Michale Klein and Jerre Stead have agreed to purchase, respectively, 500,000 and 1,000,000 newly-issued shares of Churchill common stock prior to the completion of the Mergers (at $10.00 per share for $15 million in aggregate)
  • The proposed transactions are expected to be consummated in the second quarter of 2019
  • Clarivate’s conditions to closing include Churchill having no less than $550,000,000 of available cash at the closing the transaction.
  • Jerre Stead, acting as designated shareholder on behalf of himself, Michael Klein and Sheryl von Blucher (the Shareholder Group): if the Shareholder Group beneficially owns a number of Ordinary Shares equal to or greater than 80%, 60%, 40% or 20%, respectively, of the total number of Ordinary Shares initially held by the Shareholder Group following the Mergers, the designated shareholder will have the right to nominate four, three, two or one director(s), respectively.
  • Three-year lock up for the Sponsor’s shares and warrants
  • Churchill has engaged The Klein Group, LLC, an affiliate of M. Klein and Company, LLC and of Churchill’s sponsor, to act as Churchill’s financial advisor in connection with the Mergers.  Churchill will pay The Klein Group, LLC an advisory fee of $12.5 million, which shall be earned upon the closing of the Mergers
    • $7.5 million of such fee to be payable upon the closing of the Mergers
    • $2.5 million of such fee to be payable on January 31, 2020
    • The final $2.5 million of such fee to be payable on January 29, 2021

Quick takes:  Clarivate’s condition to closing of Churchill having no less than $550 million cash seems awfully high given that there is currently approximately $690.7 million in trust and we’re working in a tough SPAC market.  Especially since there’s no backstop. Plus, while in general I like data analytics, a 20% discount to the peers doesn’t seem all that exciting for a SPAC.  It’s ok, just not a home run. However, having the Sponsors vest their equity based on decent thresholds of $15.25 and $17.50, with three year lock-ups, feels like an appropriate incentive.  What’s interesting is that since Churchill came out with a transaction so quickly (four months from IPO) there hasn’t been much time for the trust to earn interest. So, if we assume this deal closes somewhere between April 1st and May 1st, the cash per share should only be ~$10.10 at vote.  Regardless, it will be interesting to see where this trades once the team gets out on the road and gets to tell Clarivate’s story.



Well that was fast. 

Churchill Capital Corp. (CCC), which debuted their IPO just four months ago on September 7th, has announced a definitive merger agreement with Clarivate Analytics in a transaction valued at approximately $4.2 billion. Churchill CEO Jerre Stead, will serve as Executive Chairman of the combined company, while Clarivate’s existing management team, led by CEO Jay Nadler and CFO Richard Hanks, will continue to lead the business.

Clarivate, which provides comprehensive intellectual property and scientific information, decision support tools and services for academia, corporations, governments, and the legal community, was acquired in 2016 by funds affiliated with Onex Corporation (TSX: ONEX) and Baring Private Equity Asia (“BPEA”) in a carve-out from Thomson Reuters. However, the multi-year separation from Thomson Reuters is still not complete.  However, it is presumably expected to complete before the transaction with Churchill closes, which is expected to occur in the second quarter of 2019.

Churchill has not filed any documents as of yet, so right now we only have the information provided in the press release. However, those documents should be filed later today ahead of the conference call tomorrow morning (dial-in details below), but…. there is a possibility the company is waiting to file via an 8-K until after the conference call and webcast as a way of controlling the messaging.

Regardless, there doesn’t appear to be much interest from warrant holders (CCC.WS) since it’s currently trading at $0.80, down $0.3 from Friday’s close.  However, the share (CCC) is currently trading at $9.95.  An improvement from Friday’s close of $9.59, but still not above $10.00.  Without more information on this transaction, it’s hard for investors to get fully involved.  Let’s see what happens tomorrow.


The transaction implies an initial enterprise value of approximately $4.2 billion with a multiple of approximately 12.5x Clarivate’s estimated 2019 Standalone Adjusted EBITDA before synergies at the time of close. In connection with the transaction, Churchill founders have also agreed to invest an additional $15 million, however, the press release did not state the terms at which they are investing. Additional details as follows:

  • Onex, BPEA and Clarivate management are retaining 100% of their equity
    • 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.
  • 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.

The Founders have also agreed to amend the terms of their Founder Shares and Founder Warrants so that the “majority of their equity” vests only if:

  • The share price of the company exceeds $15.25 per share by 2022, and;
  • The share price of the company exceeds $17.50 per share by 2024.

However, again, there were no further details as to how many Founder Shares and Founder Warrants.


Churchill and Clarivate executives will conduct a conference call and webcast on January 15, 2019 at 8:00 a.m. Eastern Daylight Time.

Webcast link:  LINK

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:  LINK


  • 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.