Business Context and Reporting Period
This Form 8-K Current Report was filed by Clarivate Plc on September 15, 2020. The filing discloses a Regulation FD event regarding the company's efforts to secure financing for a proposed business combination.
Key Financial Metrics and Capital Structure
The filing does not report specific revenue, profit, or cash flow figures for a reporting period. Instead, it details a proposed capital transaction:
- Proposed Financing: Clarivate intends to borrow $1,600.0 million in aggregate principal amount of incremental term loans.
- Loan Structure: The incremental term loans represent a new, non-fungible tranche with terms substantially similar to the existing Credit Agreement dated October 31, 2019.
- Existing Lenders: Bank of America, N.A. (administrative agent), Citigroup, BofA Securities, RBC Capital Markets, Barclays, HSBC, and JPMorgan Chase.
Material Changes and Strategic Transactions
The primary material event is the pursuit of an Incremental Facility Amendment to fund the previously announced combination with CPA Global, a provider of intellectual property software and tech-enabled services.
- Use of Proceeds: Funds from the $1.6 billion loan are expected to finance the CPA Global transaction.
- Conditions Precedent: Closing of the CPA Global transaction is subject to customary conditions, including regulatory approvals and clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Outlook, Risks, and Management Commentary
Management is currently engaging with prospective lenders via a "Lender Presentation" (Exhibit 99.1). The filing includes significant caveats regarding the transaction:
- Uncertainty of Closing: There is no assurance that the syndication of the Incremental Facility Amendment will be consummated on favorable terms or at all.
- Non-GAAP Disclosure: The attached Lender Presentation has not been prepared in accordance with SEC rules (Regulation S-X or S-K) and does not reflect pro forma results of a combined Clarivate and CPA Global entity.
- Liability Limitation: The information furnished in this Item 7.01 is not deemed "filed" under Section 18 of the Exchange Act and is not subject to the liabilities of that section.
Investor Verification Checklist
- Verify the status of regulatory approvals required for the CPA Global combination.
- Confirm whether the $1.6 billion Incremental Facility Amendment has been successfully syndicated and closed.
- Review the attached Exhibit 99.1 (Lender Presentation) for specific financial projections, noting they are not GAAP-compliant.
- Monitor subsequent filings for updates on the Credit Agreement terms and the final structure of the CPA Global deal.