Churchill Capital Corporation II

Churchill Capital Corporation II

Oct 19, 2020 by viktoria.v

PROPOSED BUSINESS COMBINATION: Skillsoft and Global Knowledge

ENTERPRISE VALUE: $1.5 billion
ANTICIPATED SYMBOL: SKIL

Churchill Capital Corp. II proposes to combine with Software Luxembourg Holding S.A. (“Skillsoft”), a global leader in digital learning and talent management solutions.  Churchill II also intends to acquire Global Knowledge Training LLC (“Global Knowledge”), a worldwide leader in IT and professional skills development, from investment funds affiliated with Rhône Capital, a global private equity firm. Churchill II will merge with Skillsoft in a transaction valued at approximately $1.3 billion and, following the closing of the merger, the combined company will acquire Global Knowledge for approximately $233 million, putting the total cost of the transactions at $1.5 billion.

The combined company will operate as Skillsoft and will be listed on the New York Stock Exchange (the “NYSE”). The combination of Skillsoft and Global Knowledge will create the world’s leading digital learning company with a comprehensive suite of content; customized learning journeys; accessible modalities, and an expanded course portfolio of next-generation, on-demand and virtual content for enterprise learning.

The combined company’s client base will include more than 70% of Fortune 1000 companies and more than 45 million users across content platforms.

Churchill II intends to work with the Company to offer critical training resources to the more than 30 million people unemployed due to the COVID-19 pandemic on a free or administrative cost basis.


SUBSEQUENT EVENTS – 1/28/21

Churchill Capital Corp II announced today that on January 22, 2021, Churchill entered into an Amendment to the Sponsor Agreement by and among Churchill, Skillsoft, Sponsor and Churchill’s directors and officers. The Sponsor Agreement Amendment amends the Sponsor Agreement, dated as of October 12, 2020, by and among Churchill, Skillsoft, Sponsor and Churchill’s directors and officers. Pursuant to the Sponsor Agreement Amendment, 75% of the Founder Shares shall vest at the closing of the Skillsoft Merger. 25% of the Founder Shares shall vest at such time as the Stock Price Level is achieved. In the event Churchill enters into a binding agreement related to certain sale transactions involving the shares of Common Stock or all or substantially all the assets of Churchill, all unvested Founder Shares shall vest on the day prior to the closing of such Churchill Sale. The “Stock Price Level” will be considered achieved only (a) when the price of Common Stock on the New York Stock Exchange (or other exchange or other market where the Common Stock is then traded) is greater than or equal to $12.50 or (b) in a Churchill Sale.


SUBSEQUENT EVENTS – 11/11/20

Churchill Capital Corp II announced today that Prosus N.V., a global consumer internet group and one of the largest technology investors in the world, has exercised its previously announced option to invest an additional $400 million in Churchill II’s planned acquisition of Software Luxembourg Holding S.A. (“Skillsoft”) and Global Knowledge Training LLC (“Global Knowledge”), bringing Prosus’s total investment in Churchill II in connection with the transaction to $500 million. As announced on October 13, Churchill II will contribute up to $697 million of cash raised during its initial public offering in June 2019. Churchill II expects at least $530 million in common equity through private investment in public equity (“PIPE”) commitments.


TRANSACTION

Churchill II will contribute up to $697 million of cash raised during its initial public offering in June 2019. In addition, Churchill II expects more than $170 million in common equity through private investment in public equity (“PIPE”) commitments, including from Prosus, which has committed to invest $100 million into Churchill II in connection with the transactions, with the option to expand further.

Churchill II has agreed to acquire Global Knowledge from investment funds affiliated with Rhône Capital for consideration of up to 6 million warrants at an exercise price of $11.50 per share in the combined company, subject to terms of the agreement. These investment funds have also agreed to invest $50 million in additional Class A common stock at $10.00 per share, subject to certain conditions and the terms of the related subscription agreement. Additionally, Lodbrok Capital LLP has committed $20 million in connection with the Global Knowledge transaction.

Upon the close of the transaction, Churchill II’s shareholders are expected to own approximately 65% of the combined company. Skillsoft shareholders and PIPE investors will own approximately 22% and 13%, respectively.

The combined company’s capital structure will consist of approximately $463 million of net debt, or 2.3x adjusted EBITDA.

UPDATED PRESENTATION

Churchill-updated-presentation


ORIGINAL PRESENTATION


NOTABLE CONDITIONS TO CLOSING

  • Available Closing Date Cash (as defined in the Skillsoft Merger Agreement) being equal to or exceeding $644,000,000
  • The consummation of the Skillsoft Merger is not conditioned on the consummation of the Global Knowledge Merger (as defined below) or any other transactions contemplated in the Global Knowledge Merger Agreement (as defined below)

NOTABLE CONDITIONS TO TERMINATION

  • By either Churchill or Skillsoft if the Skillsoft Closing does not occur by June 12, 2021 (provided that a party does not have the right to terminate under this provision if such party’s material breach of any representations, warranties or covenants causes the Skillsoft Closing not to occur prior to June 12, 2021);
  • By either Churchill or Skillsoft if the other party has breached any of its covenants or representations and warranties such that any closing condition would not be satisfied at the Skillsoft Closing (subject to a cure period of 20 business days and waiver by the non-breaching party);

PIPE

  • $100M from Prosus, specifically 10,000,000 newly-issued shares of Churchill Class A Common Stock, at a purchase price of $10.00 per share, to be issued at the Skillsoft Closing
  • $50M from Rhône Capital L.L.C., specifically 5,000,000 newly-issued shares of Churchill Class A Common Stock at a purchase price of $10.00 per share at the Global Knowledge Closing
  • $20M from Lodbrok Capital LLP, specifically 2,000,000 newly-issued shares of Churchill Class A Common Stock, at a purchase price of $10.00 per share, to be issued at the Global Knowledge Closing
  • $10M from SuRo Capital Corp., specifically 1,000,000 newly-issued shares of Churchill Class A Common Stock, at a purchase price of $10.00 per share, to be issued at the Skillsoft Closing

ADVISORS

  • Citigroup and Tyton Partners served as financial advisors to Churchill.
  • Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal counsel to Churchill.
  • Citigroup acted as Sole Bookrunner for Churchill Capital II’s initial public offering, and B. Riley FBR acted as co-manager.
  • Weil, Gotshal & Manges LLP served as legal counsel to Skillsoft.
  • Houlihan Lokey Capital, Inc. served as financial advisor to Skillsoft.
  • Lazard and Three Keys served as financial advisors to Global Knowledge.
  • Sullivan & Cromwell LLP served as legal counsel to Global Knowledge.

CHURCHILL CAPITAL CORP. II MANAGEMENT & BOARD


Executive Officers

Michael Klein, 55
Chairman of the Board of Directors

Mr. Klein previously served as Chairman of the Board of Directors of Churchill Capital Corp, a blank check company whose sponsor is an affiliate of M. Klein and Company, LLC, and as a Director for Credit Suisse Group AG and Credit Suisse AG. Mr. Klein is the founder and managing partner of M. Klein and Company, which he founded in 2012. M. Klein and Company is a global strategic advisory firm that provides its clients a variety of advice tailored to their objectives. Mr. Klein was the co-founder and Chairman of Churchill Capital Corp, a newly incorporated blank check company formed as a Delaware corporation in 2018 for the purpose of effecting a merger, share exchange, asset acquisition, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. Churchill Capital Corp merged with Clarivate Analytics in 2019, where Mr. Klein remains Chairman of the company. Mr. Klein is a strategic advisor to global companies, boards of directors, senior executives, governments and institutional investors. Mr. Klein’s background in strategic advisory work was built during his 30-year career, including more than two decades at Citi and its predecessors, during which he initiated and executed strategic advisory transactions. He began his career as an investment banker in the M&A Advisory Group at Salomon Smith Barney and subsequently became Chairman and Co-Chief Executive Officer of Citi Markets and Banking, with responsibilities for global corporate and investment banking and Global Transaction Services across Citi. Mr. Klein is a graduate of The Wharton School of the University of Pennsylvania, where he earned his Bachelors of Science in Economics with concentrations in finance and accounting.


Peter Seibold, 54
Chief Financial Officer

Mr. Seibold is a managing director at M. Klein and Company, a global strategic advisory firm, which he joined in 2015. During that time, he has worked on a variety of transactions including notable mergers of public companies, hostile and activist defense assignments, bespoke project finance and joint venture agreements as well as both buy side and sell side M&A engagements. Prior to joining M. Klein and Company, Mr. Seibold served as a senior investment banker at Evercore from 2010 to 2014. Prior to Evercore, Mr. Seibold held a variety of senior roles in investment banking and equity capital markets at Goldman Sachs, providing clients unique insights from 1988 to 2008. Mr. Seibold holds a Bachelor of Arts degree in Economics from the University of Chicago and a M.B.A. from The University of Chicago Booth School of Business.


 

Board of Directors

Mark Klein, 57
Director

Mr. Klein is the President and Chief Executive Officer of GSV Capital, and has been a director of GSV Capital since 2011. Since 2010, Mr. Klein has served as a Managing Member and Majority Partner of M. Klein & Company, LLC. Mr. Klein also serves on the Board of Directors for Atlantic Alliance Partnership Corp. and has served as an investment adviser at B. Riley Wealth Management since April 2012. Mr. Klein was a Director of National Holding Corporations from 2011 to 2014, where he also served as Chief Executive Officer and Co-Chairman from March 2013 to December 2014. He served as a director of New University Holdings Corp., from its inception in 2010 through August 2011, when New University Holdings Corp. merged with ePals, Inc. In addition, from April 2010 until May 2011, Mr. Klein served as the Chief Executive Officer and President and a Director of 57th Street General Acquisition Corp. until it completed a merger with Crumbs Bake Shop. Subsequently, Mr. Klein served as a member of the Board of Directors of Crumbs from May 2011 to March 2014. Mr. Klein has a Bachelor’s degree, with high distinction, in Business Administration from Emory University and an MBA from the J. L. Kellogg School of Management, Northwestern University.


Malcolm S. McDermid, 40
Director

Mr. McDermid is a Director Nominee, and previously was a Director for Churchill Capital Corp. Mr. McDermid is also a Managing Director with Emerson Collective where he has led Emerson Collective’s venture capital investing efforts since August 2017. He was previously a Partner with Andreessen Horowitz, a venture capital firm based in Menlo Park, California from March 2013 to July 2017. Prior to Andreessen Horowitz, Mr. McDermid was a Director with Stifel Nicolaus, formerly Thomas Weisel Partners, a technology focused investment bank in San Francisco. He began his career at Citigroup as a financial analyst. Mr. McDermid received a Bachelor of Arts degree in Computer Science and Quantitative Economics from Tufts University and a Master of Arts in Law and Diplomacy from the Fletcher School at Tufts University.


Glenn August, 59
Director

Mr. August is the founder, Senior Partner and Chief Executive Officer of Oak Hill Advisors. In addition, he serves as global head of the firm’s distressed investment business. Mr. August is also Chairman and CEO of OHA Investment Corp., a publicly traded business development company, and has served on numerous public company boards. Mr. August has played leadership roles in numerous restructurings and served on numerous corporate boards since 1987. In 1996, he co-founded each of Oak Hill Advisors’ funds, where he serves as Managing Partner. He co-founded the predecessor firm to Oak Hill Advisors in 1987 and took over responsibility for its credit and distressed investment activities in 1990. Mr. August earned a Bachelor of Science degree from Cornell University and an M.B.A. from Harvard Business School, where he was a Baker Scholar.


Karen G. Mills, 65
Director

Ms. Mills is a Director Nominee, and previously was a Director for Churchill Capital Corp. Ms. Mills is also a Senior Fellow at the Harvard Business School and the Harvard Kennedy School since January 2014, focusing on economic policy, U.S. competitiveness, entrepreneurship and innovation. Ms. Mills was a member of President Barack Obama’s Cabinet, serving as the Administrator of the U.S. Small Business Administration from April 2009 to August 2013. Ms. Mills is the President of MMP Group since October 1993, which invests in financial services, consumer products and technology-enabled solutions businesses. Ms. Mills is Vice Chair of the immigration services company Envoy Global since September 2014. She also serves as Chair of the Advisory Committee for the Private Capital Research Institute since March 2017. Ms. Mills holds an Bachelor of Arts degree in Economics from Radcliffe College, Magna Cum Laude, and earned an M.B.A. from Harvard Business School, where she was a Baker Scholar.


Jeremy Abson
Director

Mr. Abson is currently the President and Chief Financial Officer of TBG AG, an investment company. He holds a Bachelor of Science degree from Manchester University, United Kingdom, and is a member of the Institute of Chartered Accountants in England and Wales. He completed the Advanced Management Program at the Harvard Business School in October 2011. He has more than 20 years of experience in financial and general management. Prior to joining TGB AG, Mr. Abson was the Chief Operating Officer of Usaha Tegas Sdn Bhd, a multi-billion investment company which had significant interests in the telecommunications, media, power, energy, marine logistics and real estate sectors. Prior to that, he was a Partner at PricewaterhouseCoopers.


Dena Brumpton [Appointed 6/29/20]
Director, Class III

Ms. Brumpton is currently a Non-Executive Director of Leathwaite Human Capital Limited, Non-Executive Director of Scottish Widows Schroder Wealth Holdings Limited where she chairs the Audit and Risk Committees in addition to being a member of the Remuneration Committee and Non-Executive Director of Maitland International Holdings Limited. Previously, she was the CEO for Barclays Savings, Investments and Wealth Management. Prior to Barclays, over the course of thirty years, Ms. Brumpton held various roles at Citigroup where she held several senior leadership positions in Asset Management, Corporate and Investment Banking and most recently Private Banking and Wealth Management, where she was Global Chief Operating Officer for the Private Bank.