Business Context and Reporting Period
Churchill Capital Corp II filed this Form 8-K on November 10, 2020, in connection with its proposed business combination with Skillsoft and a separate proposed Global Knowledge merger. Churchill was a special purpose acquisition company; the filing does not present operating results for Skillsoft or Churchill for a reporting period.
Key Financial and Transaction Metrics
- Prosus investment: MIH Ventures B.V. exercised its option to purchase an additional 40 million Churchill Class A common shares at $10.00 per share.
- Total Prosus PIPE investment: Expected to be 50 million shares for aggregate proceeds of $500.0 million, including Prosus’s initial purchase of 10 million shares.
- Warrants: Upon closing, Churchill will issue Prosus warrants covering shares equal to one-third of the shares purchased in the PIPE investment. The filing does not state the resulting warrant share count or exercise price.
- Rhône Capital-related subscription: Albert UK Holdings 1 Limited terminated its agreement to purchase 5 million Churchill Class A shares at $10.00 per share, representing $50.0 million of previously contemplated funding that will not be received under that agreement.
- Operating metrics: The filing does not provide revenue, profit, cash flow, margins, debt, liquidity balances, or other operating financial metrics.
Material Changes Versus the Prior Comparable Period
- Prosus increased its contemplated investment from 10 million shares to an aggregate of 50 million shares, subject to closing conditions.
- The Rhône Capital-related subscription agreement was terminated.
- Churchill received immediate early termination of the Hart-Scott-Rodino waiting periods for both the Skillsoft merger and the Global Knowledge merger.
- Following completion of the Prosus PIPE investment, Prosus will receive proportional board nomination rights, including potential rights to nominate at least one director at ownership of 10% or more and at least two directors at ownership of 20% or more. Prosus may also nominate the board chair, subject to customary committee approval.
Guidance, Outlook, Risks, Contingencies, and Unusual Items
- The Prosus First Step Investment is expected to close immediately before the Skillsoft merger. The Second Step Investment is expected to close after the First Step Closing and satisfaction of CFIUS and other regulatory conditions.
- The PIPE investment remains subject to conditions including expiration or termination of applicable antitrust waiting periods, CFIUS review for the Second Step Investment, and other required regulatory approvals.
- Prosus will provide certain business development and investor relations support services after closing.
- Closing of the proposed mergers remains subject to conditions including required stockholder approvals and regulatory approvals. The filing does not establish a definitive closing date.
- Identified risks include transaction delays or failure to close, failure to realize anticipated benefits, COVID-19 effects, indebtedness, demand for Skillsoft and Global Knowledge products, competition, cybersecurity and information-technology failures, employee retention, foreign currency movements, intellectual property, additional financing needs, and litigation.
- The filing states that any projections are inherently uncertain, are illustrative, and should not be regarded as reliable forecasts.
Important Facts for Investors to Verify
- Whether the Prosus PIPE investment ultimately closed and the final number of shares, warrants, and proceeds issued.
- Prosus’s final ownership percentage and resulting board nomination rights.
- Whether all CFIUS, antitrust, stockholder, and other closing conditions for the Skillsoft and Global Knowledge transactions were satisfied.
- The effect of terminating the $50.0 million Rhône Capital-related subscription on transaction funding and capitalization.
- Final merger consideration, financing, debt levels, liquidity, and operating results in subsequent filings.
- The registration statement, proxy statement/prospectus, and related amendments filed with the SEC for definitive transaction terms and risk disclosures.