Business Context and Reporting Period
Churchill Capital Corp II filed this Form 8-K on June 8, 2021 under Item 8.01. The filing relates to the proposed merger involving Churchill, Skillsoft, and Global Knowledge. Churchill reported that it expected to hold investor meetings on the filing date.
The filing is not a periodic financial report and does not provide a complete set of financial statements. The filing registrant is Churchill Capital Corp II, rather than Skillsoft Corp.
Key Financial Metrics
- FY 2022 combined outlook: Adjusted Gross Revenue of $645 million to $675 million.
- FY 2022 combined outlook: Adjusted EBITDA of $155 million to $175 million.
- Management stated that Skillsoft and Global Knowledge continued to perform in line with Churchill’s internal plan and reaffirmed the previously disclosed outlook.
- The filing does not provide GAAP revenue, net income, operating cash flow, free cash flow, margins, debt balances, cash balances, or liquidity measures.
Material Changes Versus Prior Comparable Period
No historical-period financial results or comparable-period changes are presented. The principal update is reaffirmation of the previously disclosed FY 2022 combined outlook, originally referenced in the May 13, 2021 press release and May 19, 2021 investor presentation.
Prosus planned to nominate Patrick Kolek, Prosus Group Chief Operating Officer, as chairperson of the post-merger board and Larry Illg, CEO of Prosus EdTech and Food, as a director. The company also planned to discuss the expected post-merger management team announced June 7, 2021.
Guidance, Outlook, Risks, and Unusual Items
- The revenue and EBITDA outlook consists of non-GAAP forward-looking measures. Churchill did not reconcile the outlook to the nearest GAAP measures, citing forecasting uncertainty and unavailable information.
- Non-GAAP measures are not GAAP measures of profit, financial condition, or liquidity and may not be comparable with similarly titled measures used by other companies.
- Completion of the Skillsoft and Global Knowledge transactions remains subject to closing conditions, including stockholder approvals, regulatory approvals, and other expected terms and timing.
- Identified risks include transaction delays or failure to close, failure to achieve expected benefits, business disruption, management distraction, COVID-19 effects, indebtedness, competition, demand for cloud-based learning solutions, cybersecurity and information-technology failures, foreign-exchange fluctuations, employee retention, additional capital needs, and legal or regulatory developments.
- The filing cautions that projections are speculative, depend on uncertain assumptions, and may differ materially from actual results. The companies disclaim an obligation to update forward-looking statements except as required by law.
- The Form S-4 registration statement was declared effective May 27, 2021, and the definitive proxy statement/prospectus was mailed on or about May 28, 2021 to stockholders of record as of April 28, 2021.
Investor Verification Points
- Verify the status and final terms of the Skillsoft and Global Knowledge mergers, including required stockholder and regulatory approvals.
- Review the Form S-4, definitive proxy statement/prospectus, and subsequent SEC filings for transaction consideration, financing, capitalization, and closing conditions.
- Assess the basis and assumptions supporting the $645 million–$675 million Adjusted Gross Revenue and $155 million–$175 million Adjusted EBITDA outlook.
- Reconcile the non-GAAP outlook to reported GAAP results when available and evaluate the companies’ debt, cash, liquidity, and cash-flow position.
- Monitor whether the proposed post-merger board and management appointments are completed and whether anticipated transaction benefits are realized.