Clarivate Plc · NYSE:CLVT
Clarivate — Churchill Capital — SPAC Merger (March 2019)
39 slides from Clarivate's SPAC merger presentation, Mar 6, 2019
Slide 1: Roadshow Presentation March 2019
Roadshow Presentation CHURCHILL CAPITAL CORP March 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”), Clarivate Analytics PLC or Camelot Holdings (Jer
Slide 3: Management Overview
3 CHURCHILL CAPITAL CORP Management Overview 1. IHS refers to IHS, Inc. and IHS Markit, the resulting entity post merger with Markit Ltd. in 2016. Jerre Stead Executive Chairman CHURCHILL CAPITAL CORP • Preeminent Operator with Demonstrated Success in Shareholder Value Creation • Previously served a
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: Clarivate: Vision / Mission / Values
5 CHURCHILL CAPITAL CORP Clarivate: Vision / Mission / Values For more on how Clarivate impacts discovery, protection and commercialization, go to https://clarivate.com/thispill Vision Statement • Delivering trusted insights to the world’s great innovators • Act with integrity – do what you say and
Slide 6: Clarivate: Business Overview
6 CHURCHILL CAPITAL CORP North America 46% Europe 25% APAC 22% Emerging Markets 7% Clarivate: Business Overview Note: Financials for 2018. Financials pro forma for divestiture of Intellectual Property Management (“IPM”) product line in 2 018 . 1. APAC includes Japan, China, Korea, Australia, New Zea
Slide 7: Clarivate: Financial Overview
7 CHURCHILL CAPITAL CORP $754 $776 $962 $181 $175 $935 $951 $995 2017A 2018A 2019E Clarivate: Financial Overview Note: Financials pro forma for divestiture of IPM product line in 2018. 1. Based on 2019E Standalone Adj. EBITDA and 2020E illustrative target run - rate Levered Free Cash Flow multiples
Slide 8: Clarivate Delivers on the Jerre Stead Playbook
8 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 9: Jerre Stead's Track Record
9 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: Company filings, FactSet. 1. An investment in Churchill Capital Corp is not an investment in IHS Markit. Historic
Slide 10: Strong Operating Performance Drove Significant Value Creation at IHS
10 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 11: Clarivate Initial Valuation at a Discount to Info Services Sector Leaders
11 CHURCHILL CAPITAL CORP ~12.7x 15.7x 15.8x 16.1x 18.0x 18.7x 20.6x 20.8x Median: 18.0x Clarivate IHS Markit S&P Global Moody's FactSet Verisk Analytics MSCI Gartner Clarivate Initial Valuation at a Discount to Info Services Sector Leaders Source: Wall Street research, FactSet. Market data as of Ma
Slide 12: Clarivate Transformation: The Next Phase
12 CHURCHILL CAPITAL CORP Clarivate Transformation: The Next Phase Clarivate has the potential to achieve margin expansion and significantly reinvigorate revenue growth. Cost - Saving Initiatives • Decreasing costs by simplifying organization structures and trimming G&A functions to enhance customer
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 Embedded in Customer Workflows 2 • Highly Recurring Subscription Revenue Model and High Retention Rates and Subscription Revenue Mix 3 • Business Model Creates Cycle of Pr
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 Curated Information Set Customers Other Offerings in Product Group Used to navigate scientific and academic research discoveries, conduct analysis and evaluate research impact Database of 1B+ citations, 3,000 journal titles reviewed annually
Slide 17: Recurring Subscription Revenue Model with High Renewal Rates
17 CHURCHILL CAPITAL CORP 82% 90%+ S&P Global 71% 95% Moody's 56% N/A IHS Markit 84% Mid-90s Verisk Analytics 80% N/A MSCI 74% 94% Gartner 80% 83% FactSet N/A N/A Sector Leaders' Average 74% ~Mid-90s Recurring Subscription Revenue Model with High Renewal Rates Note: Based solely on public disclosure
Slide 18: Business Model Creates Cycle of Profitable Growth and Reinvestment Capacity
18 CHURCHILL CAPITAL CORP Business Model Creates Cycle of Profitable Growth and Reinvestment Capacity Recurring Sales Model + Profitable Incremental Growth = Strong Cash Flow = Investment Capacity for Growth and Return 4 1 2 3 Predictable and highly resilient recurring revenue streams Proprietary
Slide 19: Strong Operating Leverage and Margin Expansion Opportunity
19 CHURCHILL CAPITAL CORP Strong Operating Leverage and Margin Expansion Opportunity 1. Estimated figures based on ~85% flow through on incremental revenue growth. Core o perating leverage plus synergies drives incrementally higher m argin e xpansion while also a llowing for i nvestment. Organic Rev
Slide 20: Foundation Set for Attractive Growth: Organic Topline and Acquisitions
20 CHURCHILL CAPITAL CORP Foundation Set for Attractive Growth: Organic Topline and Acquisitions 5 Built out independent operating functions including Accounting, Treasury, HR, Payroll and Technology With most of the carve - out work completed, Clarivate has established the platform to support fur
Slide 21: Illustrative Acquisition Opportunities
21 CHURCHILL CAPITAL CORP Illustrative Acquisition Opportunities 5 Opportunities with Strategic Fit Alignment Opportunities exist to expand footprint further with existing customers, add new customers and strategically expand into new markets and geographies. Academic Research Workflow Management Ac
Slide 22: Financial Highlights
Financial Highlights
Slide 23: Clarivate Historical and Projected Financial Performance
23 CHURCHILL CAPITAL CORP $754 $776 $962 $181 $175 $935 $951 $995 2017A 2018A 2019E $305 $311 $325 $345 2017A 2018A 2019E Clarivate Historical and Projected Financial Performance Note: Financials pro forma for divestiture of IPM product line in 2018. 1. Refer to pages 36 - 38 for reconciliation of n
Slide 24: Pathway to Unwinding Transition Costs and Potential of Transformation
24 CHURCHILL CAPITAL CORP Illustrative Target 2019E Run-Rate 2020E Total Standalone Adj. EBITDA $335 $375 $400 $425 (-) Pro Forma Cost Savings (11) - - - (-) Excess Standalone Costs (23) - - - (-) Total Cash Interest Expense, Net (100) (68) (67) (66) (-) Recurring Cash Taxes (20) (21) (22) (23) (-)
Slide 25: Opportunity for Significant Value Creation
25 CHURCHILL CAPITAL CORP $10.00 Status Quo Margin Expansion Improved Top-Line Growth Multiple Expansion Additional Acquisitions Opportunity for Significant Value Creation Margin Expansion 35% – 38% Standalone Adj. EBITDA Margin Improved Topline Growth 4.0% – 6.0% Organic Revenue Growth Value - Add
Slide 26: Clarivate Transformation: The Next Phase
26 CHURCHILL CAPITAL CORP Clarivate Transformation: The Next Phase Clarivate has the potential to achieve margin expansion and significantly reinvigorate revenue growth. Cost - Saving Initiatives • Decreasing costs by simplifying organization structures and trimming G&A functions to enhance customer
Slide 27: Investment Highlights
27 CHURCHILL CAPITAL CORP Investment Highlights • Tailwinds in Information Services Sector 1 • Collection of High Quality Assets Embedded in Customer Workflows 2 • Highly Recurring Subscription Revenue Model and High Retention Rates and Subscription Revenue Mix 3 • Business Model Creates Cycle of Pr
Slide 28: Appendix
Appendix
Slide 29: Example Product Use Cases
29 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 accesses Web of Science (“WOS”) to evaluat
Slide 30: Product Example: Web of Science
30 CHURCHILL CAPITAL CORP Product Example: Web of Science Web of Science • 150mm records • 34,000+ journals indexed • 1B+ citations • 3.5mm peer review records • 2.0mm+ unique monthly visitors Industry - Leading Data and Analytics Platform High Stakes Use Cases • Objective, independent, balanced sel
Slide 31: Product Example: Cortellis
31 CHURCHILL CAPITAL CORP Cortellis Cortellis is the leading drug development and commercialization database • Leading drug pipeline database valued by customers for its breadth and depth of content ‒ Curated database of over 70,000 drug program records with accompanying suite of analytical tools •
Slide 32: Derwent Innovation
32 CHURCHILL CAPITAL CORP Derwent Innovation • Ranked #1 comprehensive patent research and analysis solution by Outsell • Sold globally into over 50 countries • Over 80mm patent publications from 50 patent offices, which represent 98% of all patents published globally Search Proprietary Content IP e
Slide 33: Transaction Summary and Timing
33 CHURCHILL CAPITAL CORP Transaction Summary and Timing 1. Shares outstanding and ownership exclude impact of 10.6mm founder shares subject to time and/or performance vesting, 24.5mm o uts tanding management options, 34.5mm public warrants and 18.3mm private placement warrants. 2. Assumes no redemp
Slide 34: Transaction Summary
34 CHURCHILL CAPITAL CORP Transaction Summary 1. Shares outstanding and day 1 vested ownership exclude impact of 10.6mm founder shares subject to time and/or performance vest ing , 24.5mm outstanding management options, 34.5mm public warrants and 18.3mm private placement warrants. 2. $1,980mm estima
Slide 35: Summary of Shares Outstanding at Various Prices
35 CHURCHILL CAPITAL CORP Summary of Shares Outstanding at Various Prices Note: 18.3mm private placement warrants, 34.5mm public warrants and 24.5mm management options net for Treasury Stock Method ( “TS M”). 1. Day 1 shares outstanding and ownership exclude impact of 10.6mm founder shares subject t
Slide 36: Presentation of Certain Non-GAAP Financial Measures
36 CHURCHILL CAPITAL CORP Presentation of Certain Non - GAAP Financial Measures Adjusted Revenue, Standalone Adjusted EBITDA, Standalone Adjusted EBITDA Margin, Levered Free Cash Flow, and Levered Free Cas h F low Conversion, as presented, are examples of supplemental non - U.S. GAAP measures of Cla
Slide 37: Presentation of Certain Non-GAAP Financial Measures (Cont'd)
37 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 38: Reconciliation of Non-GAAP Financials Measures
38 CHURCHILL CAPITAL CORP As of December 31, 2017A 2018A Revenue, Net $918 $969 (+) Deferred Revenue Adjustment 50 3 (-) IPM Divested Revenue (32) (21) Adjusted Revenue $935 $951 Net Income / (Loss) ($264) ($242) (-) (Benefit) Provision for Income Taxes (21) 6 (+) Depreciation and Amortization 229 2
Slide 39: Additional Information
39 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