Item 1.01. Entry Into a Material Definitive Agreement
Agreement to Combine With CPA Global
On July 29, 2020, Clarivate Plc, a global leader in providing trusted
information and insights to accelerate the pace of innovation, entered into a
definitive agreement (the "Purchase Agreement") to acquire CPA Global, a global
leader in intellectual property software and tech-enabled services. Clarivate
will issue up to 218,306,663 ordinary shares to Redtop Holdings Limited
("Seller"), a portfolio company of Leonard Green Partners ("LGP"), representing
approximately 35% pro forma fully diluted ownership of Clarivate. A copy of the
Purchase Agreement is attached hereto as Exhibit 2.1 and incorporated by
reference herein, and the foregoing description is qualified in its entirety by
reference thereto.
At closing, Clarivate expects to refinance CPA Global's outstanding debt with
approximately $400 million of cash on hand and $1.5 billion of new debt.
Clarivate has secured a $1.5 billion fully committed incremental term loan
facility led by Citi and Bank of America.
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. Closing is expected to occur in the fourth
quarter of 2020.
At closing, Clarivate will enter into an Investor Rights Agreement with certain
owners of Seller, including affiliates of LGP, and certain existing shareholders
of Clarivate, including affiliates of Onex Partners Advisor LP ("Onex") and an
affiliate of Baring Private Equity Asia Pte Ltd ("Baring"), under which LGP will
be given the right to nominate two members of Clarivate's board of directors for
so long as LGP maintains ownership of at least 10% of Clarivate, and one member
of the board for so long as LGP maintains ownership of at least 5% of Clarivate.
Under the Investor Rights Agreement, LGP and certain other owners of Seller will
agree not to dispose of their Clarivate ordinary shares until October 1, 2021,
subject to certain exceptions. In addition, Onex and Baring will agree not to
dispose of the approximately 99.2 million ordinary shares they currently hold
during this lock-up period, except that with the approval of Clarivate's chief
executive officer, Onex and Baring may sell up to 49.6 million ordinary shares
beginning on or after closing. The form of Investor Rights Agreement is attached
hereto as Exhibit 10.1 and incorporated by reference herein, and the foregoing
description is qualified in its entirety by reference thereto.
Also at closing, Clarivate will enter into a Registration Rights Agreement with
LGP, certain other owners of Seller, Onex, Baring and certain other Clarivate
shareholders under which such shareholders will be entitled to cause Clarivate
to register their ordinary shares for resale under the Securities Act of 1933,
as amended (the "Securities Act") upon expiration of the lock-up period
described above. The form of Registration Rights Agreement is attached hereto as
Exhibit 10.2 and incorporated by reference herein, and the foregoing description
is qualified in its entirety by reference thereto.
Forward-Looking Statements
This report contains "forward-looking statements" as defined in the Private
Securities Litigation Reform Act of 1995. Forward-looking statements are neither
historical facts nor assurances of future performance. Instead, they are based
only on management's current beliefs, expectations, and assumptions regarding
our ability to close the CPA Global transaction and to obtain permanent debt
financing in connection therewith, and to realize the expected synergies of the
combination transaction, as well as the future of our business, future plans and
strategies, projections, anticipated events and trends, the economy, and other
future conditions. Because forward-looking statements relate to the future, they
are difficult to predict and many are outside of our control. Important factors
that could cause our actual results and financial condition to differ materially
from those indicated in the forward-looking statements are discussed under the
caption "Risk Factors" in our 2019 Annual Report on Form 10-K and in the Current
Report on Form 8-K we filed on June 19, 2020, with the Securities and Exchange
Commission ("SEC"), along with our other filings with the SEC. However, those
factors should not be considered to be a complete statement of all potential
risks and uncertainties. Additional risks and uncertainties not known to us or
that we currently deem immaterial may also impair our business operations.
Forward-looking statements are based only on information currently available to
our management and speak only as of the date of this report. We do not assume
any obligation to publicly provide revisions or updates to any forward-looking
statements, whether as a result of new
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information, future developments or otherwise, should circumstances change,
except as otherwise required by securities and other applicable laws. Please
consult our public filings with the SEC or our website at www.clarivate.com.
Item 1.02. Termination of a Material Definitive Agreement
The information set forth under Item 1.01 is incorporated herein by reference.
In connection with execution of the Purchase Agreement, Onex, Baring and certain
of Clarivate's existing shareholders entered into an agreement pursuant to
which, at closing of the CPA Global transaction, Clarivate's existing Sponsor
Agreement, Amended and Restated Shareholder Agreement, Amended and Restated
Registration Rights Agreement and Director Nomination Agreement, each of which
was filed with Clarivate's Annual Report on Form 10-K for the year ended
December 31, 2019 as Exhibit 10.2, Exhibit 10.5, Exhibit 10.6 and Exhibit 10.12,
respectively, will be terminated. The Termination Agreement is attached hereto
as Exhibit 10.3 and incorporated by reference herein, and the foregoing
description is qualified in its entirety by reference thereto.
Item 3.02. Unregistered Sales of Equity Securities
The information set forth under Item 1.01 is incorporated herein by reference.
The ordinary shares to be issued by Clarivate to Seller pursuant to the Purchase
Agreement will be exempt from the registration requirements of the Securities
Act under Section 4(a)(2) thereof.
Item 7.01. Regulation FD Disclosure
A copy of Clarivate's press release dated July 29, 2020 announcing the CPA
Global transaction is furnished as Exhibit 99.1 hereto. Clarivate will be
delivering the investor presentation attached hereto as Exhibit 99.2 on the
conference call referred to in the press release.
The information in this Item 7.01, including Exhibits 99.1 and 99.2, furnished
herewith, is being furnished and shall not be deemed "filed" for the purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or otherwise subject to the liabilities of that Section and shall not be
incorporated by reference into any registration statement or other document
pursuant to the Securities Act or the Exchange Act, except as otherwise
expressly stated in such filing.


Item 9.01. Financial Statements and Exhibits
(d) Exhibits
            No.      Description
            2.1 †      Purchase Agreement
            10.1       Form of Investor Rights Agreement
            10.2       Form of Registration Rights Agreement
            10.3 †     Termination Agreement
            99.1       Press Release dated July 29, 2020
            99.2       Supplemental Information dated July 29, 2020

† Schedules and exhibits omitted pursuant to Item 601(a)(5) of Regulation S-K. Copies of any omitted schedule or exhibit will be furnished to the SEC upon request.


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