Slide 1: Investor Presentation
Investor Presentation CHURCHILL CAPITAL CORP January 2019
Slide 2: Confidentiality and Disclosures
2 CHURCHILL CAPITAL CORP Confidentiality and Disclosures This presentation is for information purposes only and does not constitute a recommendation to purchase any equity, debt or o the r financial instruments of Churchill Capital Corp (“Churchill”) or Camelot Holdings (Jersey) Limited (“Clarivate”
Slide 3: Presenters
3 CHURCHILL CAPITAL CORP Presenters 1. IHS refers to IHS, Inc. and IHS Markit, the resulting entity post merger with Markit Ltd. in 2016. Jerre Stead Co - Founder and Executive Chairman CHURCHILL CAPITAL CORP • Preeminent Operator with Demonstrated Success in Shareholder Value Creation • Previously
Slide 4: Overview of Churchill Capital Corp
4 CHURCHILL CAPITAL CORP • Industry - building strategist • Accomplished operating executive with over 30 years of experience with innovative value - creation initiatives Overview of Churchill Capital Corp Source: IDC. 1. Predictive Analytics and Data Markets is defined as the combined Worldwide Bus
Slide 5: Overview of Clarivate Analytics
5 CHURCHILL CAPITAL CORP $240mm 2020E Illustrative Run - Rate Levered FCF (2,5) 80% / 20% 82% / 18% 32% 32% 34% / 35% $753 $776 $962 $183 $174 $936 $950 $995 2017A Q3'18 LTM 2019E Overview of Clarivate Analytics Note: Financials pro forma for divestiture of Intellectual Property Management (“IPM”) d
Slide 6: Clarivate Opportunity Aligns with Churchill Investment Thesis
6 CHURCHILL CAPITAL CORP Clarivate Opportunity Aligns with Churchill Investment Thesis 1. Assumes no redemptions. 2. Refer to page 36 for reconciliation of non - GAAP financial measures. 3. Valuation excludes impact of warrants, management options and founder promote shares subject to vesting. Stron
Slide 7: Jerre Stead's Track Record
7 CHURCHILL CAPITAL CORP -- 100% 200% 300% 400% 500% 600% 700% 800% 900% 1,000% 1,100% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Jerre Stead’s Track Record Source: FactSet. 1. An investment in Churchill Capital Corp is not an investment in IHS Markit. Historical results of IHS
Slide 8: Strong Operating Performance Drove Significant Value Creation at IHS
8 CHURCHILL CAPITAL CORP $43 $105 $130 $175 $207 $234 $288 $250 $405 $514 $490 $491 $701 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 $476 $551 $688 $844 $967 $1,058 $1,326 $1,530 $1,692 $2,080 $2,184 $2,735 $3,600 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
Slide 9: Clarivate Delivers on the Jerre Stead Playbook
9 CHURCHILL CAPITAL CORP Clarivate Delivers on the Jerre Stead Playbook Ability to streamline operations and reduce excess costs Clarivate platform is optimized to integrate future add - on acquisitions Standalone Adj. EBITDA (1) m argins in excess of 30% and minimal capital expenditures Tuck - in a
Slide 10: Recent Clarivate Accomplishments and Further Potential Upside
10 CHURCHILL CAPITAL CORP Recent Clarivate Accomplishments and Further Potential Upside Carve - Out from Thomson Reuters Cost Savings Initiatives Product Enhancements • Actively integrated additional content and capabilities into existing products and launched new products • Implemented sales organi
Slide 11: Initial Valuation at a Discount to Sector Leaders
11 CHURCHILL CAPITAL CORP ~12.5x 13.8x 14.0x 14.8x 15.5x 16.8x 17.0x 17.7x Median: 15.5x Kairos S&P Global Moody's IHS Markit FactSet Verisk MSCI Gartner Clarivate Initial Valuation at a Discount to Sector Leaders Source: Wall Street research, FactSet. Market data as of Jan. 11, 2019. Note: Calendar
Slide 12: Transaction Summary and Timing
12 CHURCHILL CAPITAL CORP Transaction Summary and Timing Ownership • Churchill to own 26% of pro forma entity (1) ‒ Additional 1.5mm shares purchased by Jerre Stead and Michael Klein from Churchill at $10 per share • Management, Onex and BPEA to roll full stake in Clarivate and retain ~74% ownership
Slide 13: Investment Highlights
Investment Highlights
Slide 14: Investment Highlights
14 CHURCHILL CAPITAL CORP Investment Highlights • Tailwinds in Information Services Sector 1 • Collection of High Quality Assets in Attractive Markets 2 • Highly Curated Content Sets Embedded Within Customer Workflows 3 • Highly Recurring Subscription Revenue Model and Market Leading Retention Rates
Slide 15: Tailwinds in Information Services Sector
15 CHURCHILL CAPITAL CORP $155 $174 $195 $219 2018E 2019E 2020E 2021E Tailwinds in Information Services Sector Source: IDC, Outsell, Inc. all rights reserved. 1. The Predictive Analytics and Data Markets is defined as the combined Worldwide Business Analytics Services, Worldwide Big Dat a a nd Analy
Slide 16: Key Products
16 CHURCHILL CAPITAL CORP Key Products Product Description Customers Cross - Sale Product Offerings Used to navigate scientific and academic literature, conduct research and evaluate research 7,000+ leading academic institutions and governments and research intensive corporations use Web of Science
Slide 17: Highly Curated Content Sets Embedded Within Customer Workflows
17 CHURCHILL CAPITAL CORP Highly Curated Content Sets Embedded Within Customer Workflows 3 Data Collection 3,000+ journal titles reviewed annually with ~ 10 % accepted Data Categorization Curation Result Standardized and categorized journal information Domain experts identify and index citable items
Slide 18: Recurring Subscription Revenue Model with High Renewal Rates
18 CHURCHILL CAPITAL CORP Recurring Subscription Revenue Model with High Renewal Rates Note: Based solely on public disclosures of comps; calculation methodologies may vary. 1. % subscription revenue and revenue retention rates based on FY’17 for all sector leaders, unless noted otherwise. 2. Reven
Slide 19: Business Model Creates Cycle of Profitable Growth and Reinvestment Capacity
19 CHURCHILL CAPITAL CORP 32% 34% / 35% $753 $776 2017A Q3'18 LTM Business Model Creates Cycle of Profitable Growth and Reinvestment Capacity Note: Financials pro forma for divestiture of IPM division in 2018. 1. Refer to page 36 for reconciliation of non - GAAP financial measures. 2. 2016 financial
Slide 20: Strong Operating Leverage and Margin Expansion Opportunity
20 CHURCHILL CAPITAL CORP Strong Operating Leverage and Margin Expansion Opportunity 1. Estimated figures assume 85% flow through on revenue growth. Core o perating leverage plus synergies drives incrementally higher m argin e xpansion while also a llowing for i nvestment. Organic Revenue Growth % 1
Slide 21: Foundation Set for Attractive Growth: Organic Topline and Acquisitions
21 CHURCHILL CAPITAL CORP $190 $200 $207 2016A 2017A Q3'18 LTM Foundation Set for Attractive Growth: Organic Topline and Acquisitions Note: Financials pro forma for divestiture of IPM division in 2018. 2016 financial information represents the aggregated resu lts of Clarivate Analytics and its prede
Slide 22: Illustrative Acquisition Opportunities
22 CHURCHILL CAPITAL CORP Illustrative Acquisition Opportunities 6 Opportunities with Strategic Fit Alignment Increase penetration of existing customers Expand into adjacent customers / markets Increase penetration of high growth markets / geographies A B C Opportunities exist to expand footprint fu
Slide 23: Financial Highlights
Financial Highlights
Slide 24: ACV Analysis – Subscription Revenue
24 CHURCHILL CAPITAL CORP $714 $709 $721 $724 $738 $728 $753 $757 $7 $21 $11 $12 $14 $28 $5 $10 $722 $730 $732 $736 $751 $756 $758 $767 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Renewals Under Contract Open Renewals YoY growth: $32mm 4.5% ACV Analysis – Subscription Revenue Note: ACV is shown
Slide 25: Clarivate Historical and Projected Financial Performance
25 CHURCHILL CAPITAL CORP 32% 32% 34% / 35% $303 $308 $325 $345 2017A Q3'18 LTM 2019E $753 $776 $962 $183 $174 $936 $950 $995 2017A Q3'18 LTM 2019E Clarivate Historical and Projected Financial Performance Note: Financials pro forma for divestiture of IPM division in 2018. 1. Refer to page 36 for rec
Slide 26: 2020E Illustrative Free Cash Flow Generation
26 CHURCHILL CAPITAL CORP 2020E Illustrative Free Cash Flow Generation Source: Wall Street research, FactSet. Market data as of Jan. 11, 2019. Note: In each of 2021 and 2022, Clarivate will have to make payments of up to $30mm in connection with a Tax Receivable Agree men t (“TRA”). Subsequent to 20
Slide 27: Opportunity for Significant Value Creation
27 CHURCHILL CAPITAL CORP $10.00 Status Quo Margin Expansion Improved Top-Line Growth Multiple Expansion Additional Acquisitions Opportunity for Significant Value Creation Immediate Margin Expansion 35% – 38% Adj. EBITDA Margin Improved Topline Growth 4.0% – 6.0% Organic Revenue Growth Value - Add A
Slide 28: Appendix
Appendix
Slide 29: Transaction Terms
29 CHURCHILL CAPITAL CORP Transaction Terms 1. Shares outstanding and ownership exclude impact of 34.5mm public warrants, 18.3mm founder warrants and 10.6mm founder prom ote shares subject to vesting. 2. $2,054mm Q3'18 debt pro forma for $31mm debt repaid in IPM divestiture and $660mm illustrative d
Slide 30: Leadership Team Biographies
30 CHURCHILL CAPITAL CORP Leadership Team Biographies Executive Industry Experience Years at Clarivate Richard Hanks Chief Financial Officer 24 years <2 years • Oversees all Controllership, Tax, FP&A, Treasury Operations, Internal Audit functions and Information Systems; leads PMO cost saving progra
Slide 31: Leadership Team Biographies (Cont'd)
31 CHURCHILL CAPITAL CORP Leadership Team Biographies (Cont’d) Annette Thomas CEO, Web of Science Mukhtar Ahmed President, Cortellis Daniel Videtto President, Derwent and Techstreet Jeff Roy President, CompuMark Chris Veator President, MarkMonitor 25 years 25 years 25 years 25 years 33 years <2 year
Slide 32: Example Product Use Cases
32 CHURCHILL CAPITAL CORP Example Product Use Cases Customers use Clarivate’s products in a variety of ways, including in the following “real world” examples: Key Products Use Cases A physics professor planning a research program and making a grant proposal will access the Web of Science database to
Slide 33: Churchill's Partners in the Transaction
33 CHURCHILL CAPITAL CORP Churchill’s Partners in the Transaction Onex and BPEA are committed sponsors who will roll 100% of their existing equity into the pro forma company. • Founded in 1997, BPEA is one of the largest and most established independent alternative asset management firms in Asia, wi
Slide 34: Presentation of Certain Non-GAAP Financial Measures
34 CHURCHILL CAPITAL CORP Presentation of Certain Non - GAAP Financial Measures Adjusted Revenue, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Standalone Adjusted EBITDA, Standalone Adjusted EBITDA Mar gin , Levered Free Cash Flow, and Levered Free Cash Flow Conversion, as presented, are example
Slide 35: Presentation of Certain Non-GAAP Financial Measures (Cont'd)
35 CHURCHILL CAPITAL CORP Presentation of Certain Non - GAAP Financial Measures (Cont’d) We also monitor Standalone Adjusted EBITDA because Clarivate’s credit agreement governing its credit facilities and its inden tur e governing its senior unsecured notes contain certain covenants (including debt
Slide 36: YE, 12/31 LTM YE, 12/31 2017A 9/30/18 2019E Revenue, Net $920 $972 $978 (+)
36 CHURCHILL CAPITAL CORP YE, 12/31 LTM YE, 12/31 2017A 9/30/18 2019E Revenue, Net $920 $972 $978 (+) Deferred Revenue Adjustment 50 7 - (-) IPM Divested Revenue (32) (29) - Adjusted Revenue $938 $950 $978 Net Income (Loss) ($266) ($246) (-) (Benefit) Provision for Income Taxes (21) (17) (+) Depreci
Slide 37: Additional Information
37 CHURCHILL CAPITAL CORP Additional Information CHURCHILL AND CLARIVATE AND THEIR RESPECTIVE DIRECTORS AND EXECUTIVE OFFICERS, UNDER SEC RULES, MAY BE DEEMED TO BE PARTICIPA NTS IN THE SOLICITATION OF PROXIES OF CHURCHILL’S STOCKHOLDERS IN CONNECTION WITH THE PROPOSED TRANSACTION. INVESTORS AND SEC