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CC Neuberger Principal Holdings II

CC Neuberger Principal Holdings II

Oct 19, 2020 by Roman Developer

PROPOSED BUSINESS COMBINATION: Getty Images

ENTERPRISE VALUE: $4.8 billion
ANTICIPATED SYMBOL: GETY

CC Neuberger Principal Holdings II proposes to combine with Getty Images, a preeminent global visual content creator and marketplace.

Getty Images is a preeminent global visual content creator and marketplace that offers a full range of content solutions to meet the needs of any customer around the globe, no matter their size. Through its Getty Images, iStock and Unsplash brands, websites and APIs, Getty Images serves over 1 million customers in almost every country in the world and is the first-place people turn to discover, purchase and share powerful visual content from the world’s best photographers and videographers. Getty Images works with over 450,000 contributors and more than 300 content partners to deliver this powerful and comprehensive content. Each year Getty Images covers more than 160,000 news, sport and entertainment events providing depth and breadth of coverage that is unmatched. Getty Images maintains one of the largest and best privately-owned photographic archives in the world with over 135 million images dating back to the beginning of photography.

WARRANT REDEMPTION – 9/19/22 – LINK

  • Pursuant to the terms of the Warrant Agreement, Getty Images is entitled to redeem all of the outstanding Warrants for the Redemption Price if the last sales price of the Class A Common Stock is at least $18.00 per share on each of twenty (20) trading days within the thirty (30) trading-day period ending on the third business day prior to the date on which a notice of redemption is given.
    • This share price performance target has been met.
    • At the direction of the Company, the warrant agent is delivering a notice of redemption to each of the registered holders of the outstanding Warrants for a redemption price of $0.01 per Warrant (the “Redemption Price”)

SUBSEQUENT EVENT – (8-K LINK)

  • On December 28, 2021, CC Neuberger Principal Holdings II and Tech-focused holding company Multiply Group announced the signing of a binding commitment for Multiply to make an additional $75 million PIPE investment at a purchase price of $10.00 per share, on the same terms as the existing PIPE investors, in CC Neuberger’s business combination with Getty Images.

TRANSACTION

  • The business combination values Getty Images at an enterprise value of $4.8 billion, representing a multiple of approximately 15.2x of enterprise value to 2022E Adj. EBITDA of $315 million.
  • The total equity investment of approximately $1.2 billion raised in this transaction (including CC Neuberger’s cash in trust and the forward purchase and PIPE investments described below) will be used to pay down existing debt and conservatively capitalize the Company’s balance sheet for the future.
  • In the event the cash in CC Neuberger’s trust account is reduced by redemptions, an affiliate of CC Neuberger’s sponsor will backstop redemptions for up to $300 million (subject to availability of capital in accordance with the terms of the backstop).
  • With the $300 million backstop, as well as a $200 million forward purchase agreement provided by an affiliate of the CC Neuberger sponsor and $150 million in PIPE financing, this transaction has been structured to provide for a high degree of capital certainty.
  • Additionally, existing common equity shareholders will roll 100 percent of their equity in the transaction and together with existing preferred shareholders are expected to own approximately 64 percent of the combined company at closing.
  • In connection with the closing of the transaction, which is expected in the first half of 2022, CC Neuberger will merge into a subsidiary of Getty Images Holdings, Inc, a newly formed Delaware corporation that will continue as the publicly-traded company and parent of Getty Images.

CC Neuberger II Transaction Overview

PIPE

  • Subsequent Event – On December 28, 2021, CC Neuberger Principal Holdings II and Tech-focused holding company Multiply Group announced the signing of a binding commitment for Multiply to make an additional $75 million PIPE investment at a purchase price of $10.00 per share, on the same terms as the existing PIPE investors, in CC Neuberger’s business combination with Getty Images.
  • Pursuant to the Subscription Agreements, the PIPE Investors agreed to subscribe for and purchase, and CCNB and New CCNB agreed to issue and sell to such investors, on the closing date, an aggregate of 15,000,000 New CCNB Class A Common Shares for a purchase price of $10.00 per share, for aggregate gross proceeds of $150,000,000 (the “PIPE Financing”)
    • $100 million from the CCNB2 sponsor and $50 million from the Getty family

EARNOUT

  • Under the terms of the Business Combination Agreement, the aggregate consideration to be paid in the Business Combination is derived from an aggregate transaction equity value of $2,912,000,000, apportioned between cash and New CCNB Class A Common Shares, as more specifically set forth therein (and which account for the value of Company’s vested options). In addition to the consideration to be paid at Closing, New CCNB will issue to equityholders of the Company an aggregate of up to 65,000,000 New CCNB Class A Common Shares, issuable upon and subject to the occurrence of the applicable vesting events, as more specifically set forth therein.  Each option to purchase shares of the Company (whether vested or unvested) will be converted into a comparable option to purchase New CCNB Class A Common Shares, pursuant to a market-based equity incentive plan prepared by CCNB and the Company prior to the closing date.:
    • 1/3 vesting at $12.50
    • 1/3 vesting at $15.00
    • 1/3 vesting at $17.50
  • 20% of the existing founder shares will be subject to certain vesting conditions, with half vesting at $12.50 and half at $15.00

LOCK-UP

  • In connection with any registered offering of Equity Securities of the Company by either the Company for its own account or by holders of Registrable Securities pursuant to this Agreement, and upon the request of the managing underwriter in such offering, each holder of Registrable Securities agrees to execute a customary lock-up agreement;
    • (a) each such holder shall sign a lock-up agreement that contains restrictions that are no more restrictive than the restrictions contained in the lock-up agreements executed by any other holder of Registrable Securities participating in such offering
    • (b) such lock-up agreement shall not restrict the Transfer of Registrable Securities for more than ninety (90) days after the date of the underwriting agreement executed with the managing underwriter of such offering
    • (c) such lock-up agreement shall not restrict
      • (i) Transfers to Permitted Transferees
      • (ii) any Getty Family Permitted Encumbrance. The Company shall cause its executive officers and its directors, and shall use reasonable best efforts to cause other holders of Equity Securities who Beneficially Own 5% or more of the then outstanding Equity Securities (considered on a fully-diluted basis), to enter into lock-up agreements that contain restrictions that are no less restrictive than the restrictions contained in the lock-up agreements executed by the holders of Registrable Securities. Each holder of Registrable Securities agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the managing underwriter which are consistent with the foregoing or which are necessary to give further effect thereto.
    • Notwithstanding anything to the contrary contained in this Section 6, each holder of Registrable Securities shall be released, pro rata, from any lock-up agreement entered into pursuant to this Section 6 in the event and to the extent that the managing underwriter or the Company permit any discretionary waiver or termination of the restrictions of any lock-up agreement pertaining to any officer, director or holder of Equity Securities.
    • Notwithstanding the foregoing, no Investor that does not participate in such offering shall be subject to such lock-up arrangements so long as such Investor holds less than one percent (1%) of the Equity Securities (considered on a fully-diluted basis).

FORWARD PURCHASE AGREEMENT AND BACKSTOP AGREEMENT

  • In connection with the signing of the Business Combination Agreement, New CCNB, CCNB, and Neuberger Berman Opportunistic Capital Solutions Master Fund LP, a Cayman Islands exempted limited partnership (“NBOKS”) entered into a side letter to:
    • (a) that certain Forward Purchase Agreement, pursuant to which, among other things, NBOKS confirmed the allocation to CCNB of $200,000,000 under the Forward Purchase Agreement and its agreement to, at Closing, subscribe for 20,000,000 New CCNB Class A Common Shares, and 3,750,000 Forward Purchase Warrants and
    • (b) certain Backstop Facility Agreement (the “Backstop Agreement”) whereby NBOKS agreed to, subject to the availability of capital it has committed to all special purpose acquisition companies sponsored by CC Capital Partners, LLC and NBOKS on a first come first serve basis and the other terms and conditions included therein, at Closing, subscribe for New CCNB Class A Common Shares to fund redemptions by shareholders of CCNB in connection with the Business Combination in an amount of up to $300,000,000 (clauses “(a)” and “(b),” collectively, the “NBOKS Side Letter”), which NBOKS Side Letter provides for the assignment of CCNB’s obligations under the Forward Purchase Agreement and the Backstop Agreement to New CCNB to facilitate the Business Combination.

NOTABLE CONDITIONS TO CLOSING

  • The Company’s Net Funded Indebtedness being equal to or less than $1,350,000,000

NOTABLE CONDITIONS TO TERMINATION

  • In the event the Closing has not occurred on or before June 9, 2022 (the “Outside Date”)

ADVISORS

  • Rothschild & Co is serving as lead financial advisor to CC Neuberger Principal Holdings II,
  • Credit Suisse Securities (USA) LLC and Citigroup Global Markets Inc. are serving as capital markets advisors to CC Neuberger Principal Holdings II
  • Solomon Partners served as a financial advisor providing a fairness opinion to the Board of CC Neuberger.
  • Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC are acting as financial advisors to Getty Images.
  • Weil Gotshal & Manges LLP is acting as legal counsel to Getty Images
  • Kirkland & Ellis LLP is acting as legal counsel to CC Neuberger.
  • Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal counsel and Berenson & Company LLC is acting as financial advisor to the Getty Family.
  • Jones Day is acting as legal counsel and PJT Partners is acting as financial advisor to Koch Equity Development.

MANAGEMENT & BOARD

Executive Officers

Chinh E. Chu, 53
Chief Executive Officer & Director

Mr. Chu has over 25 years of investment and acquisition experience. Since January 2020, Mr. Chu has been the Chief Executive Officer and Director of CCN I (NYSE: PCPL), a blank check company co-founded by CC Capital and formed for substantially similar purposes as our company, which has not yet announced or completed its initial business combination. CCN I sold 41.4 million units in its initial public offering, generating gross proceeds of $414.0 million. Since June 2018, Mr. Chu has been the Vice Chairman of Collier Creek (NYSE: CCH), a blank check company co-founded by him and formed for substantially similar purposes as our company. Collier Creek sold 44.0 million units in its initial public offering, generating gross proceeds of $440.0 million. On June 5, 2020, Collier Creek announced that it had entered into a definitive agreement with Utz Quality Foods, LLC, a leading U.S. manufacturer of branded salty snacks, to combine and form Utz Brands. In 2016, Mr. Chu co-founded CF Corporation for substantially similar purposes as our company. CF Corporation sold 69.0 million units in its initial public offering, generating gross proceeds of $690.0 million. On November 30, 2017, CF Corporation consummated the acquisition of Fidelity & Guaranty Life, a provider of annuities and life insurance products, for approximately $1.835 billion plus the assumption of $405 million of existing debt, and related transactions. In connection with the FGL business combination, the name of the company was changed from “CF Corporation” to “FGL Holdings” (NYSE: FG). Mr. Chu served as Co-Executive Chairman of FGL Holdings. Mr. Chu is also the Founder and the Senior Managing Partner of CC Capital, a private investment firm which he founded in November 2015. As Senior Managing Director of CC Capital, Mr. Chu led the effort to take Dun & Bradstreet private in a $7.2 billion deal that closed in February 2019. Before founding CC Capital, Mr. Chu worked at Blackstone from 1990 to December 2015, where Mr. Chu led numerous investments across multiple sectors, including technology, financial services, chemicals, specialty pharma and healthcare products, and packaging. Mr. Chu was a Senior Managing Director at Blackstone from 2000 until his departure in December 2015, where he served, at various points, as a member of Blackstone’s Executive Committee, the Co-Chair of Blackstone’s Private Equity Executive Committee and as a member of Blackstone Capital Partners’ Investment Committee. Before joining Blackstone in 1990, Mr. Chu worked at Salomon Brothers in the Mergers & Acquisitions Department. In addition to Mr. Chu’s role as Co-Executive Chairman of FGL Holdings, he has served on the boards of directors of NCR Corporation (NYSE: NCR) and Stearns Mortgage since 2015 and Dun & Bradstreet since 2019. Mr. Chu previously served on the board of directors of AVINTIV from 2011 to 2012, BankUnited Inc. from 2009 to 2014, Kronos Incorporated from 2014 to 2015, Biomet, Inc. from July 2007 to September 2007 and from 2013 to 2015, Freescale Semiconductor, Ltd. from 2011 to 2015 and HealthMarkets, Inc. from 2006 to 2016. Mr. Chu also previously served on the board of directors of Alliant Insurance Services, Inc., AlliedBarton Security Services, Celanese Corporation, DJO Global, Inc., Graham Packaging, the London International Financial Futures and Options Exchange, Nalco Company, Nycomed, Stiefel Laboratories and SunGard Data Systems, Inc. Mr. Chu received a B.S. in Finance from the University of Buffalo.

Matthew Skurbe, 46
Chief Financial Officer

Beginning in July 2020, Mr. Skurbe will be the Chief Financial Officer and Chief Operating Officer and Senior Managing Director of CC Capital. Prior to joining CC Capital, Mr. Skurbe was the Treasurer and Managing Director in Finance for Blackstone. Before joining Blackstone in 2009, Mr. Skurbe was the CFO for Merrill Lynch Bank & Trust, a multi-billion dollar bank housing several of Merrill Lynch’s consumer lending and banking businesses. Prior to that role, Mr. Skurbe spent seven years supporting Merrill Lynch’s Treasury function and had previous roles with Amerada Hess and Arthur Andersen LLP. Mr. Skurbe is also a board member of the Association for Financial Professionals, Project Sunshine and Children’s Specialized Hospital Foundation. Mr. Skurbe received a BS in Accounting from Rutgers University, achieved the Certified Public Accountant certification and is a Certified Treasury Professional.

Jason K. Giordano, 41
Executive Vice President, Corporate Development

Mr. Giordano has 18 years of investment and acquisition experience across several industry sectors, including consumer products, education, packaging, chemicals and industrials, among others. Since June 2018, Mr. Giordano has served as the Co-Executive Chairman of Collier Creek Holdings (NYSE: CCH), a blank check company which he co-founded to pursue an acquisition, merger or similar business combination with one or more companies in the consumer goods and related sectors On June 5, 2020, Collier Creek announced that it had entered into a definitive agreement with Utz Quality Foods, LLC, a leading U.S. manufacturer of branded salty snacks, to combine and form Utz Brands. Mr. Giordano has been a Senior Managing Director at CC Capital since November 2018. Previously, Mr. Giordano was a Managing Director in the private equity group at Blackstone where he oversaw investments in the consumer, education, packaging and chemicals sectors. During his over 11 year tenure at Blackstone from August 2006 to October 2017, Mr . Giordano was involved in 12 initial and follow-on acquisitions representing over $10 billion of transaction value. Prior to Blackstone, Mr. Giordano was a private equity investment professional at Bain Capital, LP and an investment banker with Goldman, Sachs, & Co. Mr. Giordano has served on the board of directors of Collier Creek Holdings (NYSE: CCH) since June 2018, and previously served on the board of directors of Pinnacle Foods, Inc. (NYSE: PF), a U.S.-based manufacturer and marketer of branded food products, from 2007 to September 2015, Crocs, Inc. (Nasdaq: CROX), a global supplier of branded footwear, from January 2015 to October 2017, AVINTIV, a global supplier of specialty materials primarily sold to consumer goods manufacturers, from January 2011 to October 2015, Outerstuff LLC, a leading U.S. supplier of licensed children’s sports apparel, from May 2014 to October 2017, Ascend Learning, LLC, a provider of online professional training tools and educational software, from July 2017 to October 2017, and HealthMarkets, Inc., a direct-to-consumer provider of health, life, supplemental, and other insurance and related products, from February 2009 to October 2017. Mr. Giordano earned an M.B.A. with high distinction from Harvard Business School, where he was a Baker Scholar, and an A.B. with high honors in economics from Dartmouth College.

Douglas Newton, 41
Executive Vice President, Corporate Development

Since January 2020, Mr. Newton has served as the Chief Financial Officer of CCN I (NYSE: PCPL), a blank check company co-founded by CC Capital and formed for substantially similar purposes as our company. Mr. Newton has more than 16 years of professional investing experience across both public and private markets. Mr. Newton joined CC Capital at its founding and was integral to CC Capital’s $7.2 billion acquisition of Dun & Bradstreet. Mr. Newton served as Chief Financial Officer of CF Corporation, the permanent capital vehicle through which CC Capital acquired Fidelity & Guaranty Life, and he played a leading role in the $2.5 billion acquisition. Before joining CC Capital, Mr. Newton was a Founding Partner at WindAcre, an investment firm that owns a concentrated, long-term portfolio of global public equities and takes a private equity approach to public equity investing. At WindAcre, Mr. Newton helped lead deep company-specific research focused primarily on assessing the quality of potential investment opportunities and their intrinsic value. Prior to that, Mr. Newton was a Senior Investment Analyst at Seneca Capital Investments, a multi-strategy hedge fund, where he focused on making long-term fundamental value investments across a company’s capital structure. Mr. Newton also served as an Analyst at DLJ Merchant Banking Partners, a private equity firm, where he focused on investments in the industrial, power and media sectors. In addition, Mr. Newton served as an Analyst at Credit Suisse First Boston’s Media & Communications Group, and at Donaldson, Lufkin & Jenrette. Mr. Newton received a A.B. in Economics from Dartmouth College and an M.B.A. from the Stanford Graduate School of Business.

 

Board of Directors

Charles Kantor, 49
Director

Mr. Kantor is a Managing Director at Neuberger Berman after joining the firm in 2000. Since January 2020, Mr. Kantor has served on the board of directors CCN I (NYSE: PCPL), a blank check company co-founded by CC Capital and formed for substantially similar purposes as our company, which has not yet announced or completed its initial business combination. Mr. Kantor is the founder and Senior Portfolio Manager of the Kantor Group, which manages over $5 billion of equity and fixed income securities for institutional and high net worth investors as of December 31, 2019. Mr. Kantor leads a team of eight investment professionals with aggregate investment experience of over 150 years and sits on the firm’s Partnership Committee as a senior leader of Neuberger Berman. Prior to joining Neuberger Berman, Mr. Kantor led Stern Stewart’s Financial Institutions division, where he advised clients on implementing EVA-based financial management systems and co-authored academic papers in the Journal of Applied Corporate Finance. In addition, Mr. Kantor is a regular commentator and contributor to various financial and business news media outlets. Mr. Kantor earned a Bachelor of Commerce in Accounting and Economics from the University of Cape Town, South Africa and an MBA (with honors) from Harvard University Graduate School of Business.

Joel Alsfine, 51
Director 

Mr. Alsfine is a Senior Advisor to MSD Capital LP. Until June 2020, Mr. Alsfine was a Partner at MSD Capital LP in New York, the investment firm formed in 1998 to exclusively manage the capital of Michael Dell and his family, which he joined in 2002. From 2000 to 2002, Mr. Alsfine was a Managing Director of TG Capital Corp. in Miami. Prior to 2000, he held the post of Engagement Manager with McKinsey & Co. in New York and also worked with Fisher Hoffman Stride an accounting and auditing firm in Johannesburg, South Africa. From January 2015, Mr. Alsfine has served on the board of Asbury Automotive Group (NYSE: ABG) where he is head of the Capital Allocation and Risk Committee and serves on the Audit Committee. From July 2019, Mr. Alsfine has served on the board of Life Time Inc. where he serves on the Audit and Finance committees. Mr. Alsfine received his MBA from Stanford Graduate School of Business and his Bachelor of Commerce (Honors) in Accounting from the University of the Witwatersrand in South Africa.

James Quella, 70
Director

Mr. Quella has served as Chairman of the board of Michaels Companies, Inc. since April 2019, having previously served as Lead Independent Director since November 2018. Mr. Quella retired as a Senior Managing Director, Senior Operating Partner and co-head of the Portfolio Operations Group at Blackstone in the Private Equity Group in June 2014, having served in these roles since 2003. Mr. Quella serves as a director and on the Compensation Committee and Audit Committee of Dun and Bradstreet Corporation. Mr. Quella was formerly a director of Allied Waste, Catalent Pharma Solutions, Inc., Columbia House, Celanese Corporation, DJO Global, Inc., FGL Holdings, Freescale Semiconductor, Inc., Graham Packaging Company, L.P., Houghton Mifflin Harcourt Company, Intelenet Global Services, Lionbridge Technologies, Inc., The Nielsen Company and Vanguard Health Systems, Inc. Mr. Quella received a B.A. in International Studies from The University of Wisconsin-Madison and an M.B.A. with Dean’s Honors from the University of Chicago Graduate School of Business.

Jonathan Gear, [] [Appointed 6/1/21]
Director

Mr. Gear is executive vice president and chief financial officer of IHS Markit. Earlier, he served as president of resources, transportation and CMS for IHS Markit, including business lines supporting the automotive, energy, chemicals, maritime and aerospace industries. In addition, he served in multiple senior vice president positions and as president and COO of IHS CERA. Jonathan previously held leadership positions at Activant Solutions, smarterwork.com and Booz Allen Hamilton. He holds a B.A. from the University of California, Berkeley and an MBA from Stanford Graduate School of Business.

ByRoman Developer