Skillsoft Corp. · NYSE:SKIL
Skillsoft — SPAC Merger (January 2021)
31 slides from Skillsoft's SPAC merger presentation, Jan 12, 2021
Slide 1: Churchill Capital January 2021 Investor Presentation
CHURCHILL CAPITAL January 2021 Investor Presentation
Slide 2: Disclaimer
2 Disclaimer IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT This communication is being made in respect of the proposed merger transaction involving Churchill II and Skillsoft. Churchil l I I intends to file a registration statement on Form S - 4 with the SEC, which will include a proxy s
Slide 3: Overview of the Churchill companies: Who We Are
3 Overview of Asset Vehicle Acquisition Announced January 2019 July 2020 Churchill Partner Jerre Stead Paul Galant & Bill Veghte Equity Value $17B $7B (1) Firm Value $21B $11B (1) CHURCHILL CAPITAL III CHURCHILL CAPITAL I The Churchill companies Who We Are Source: FactSet. Market data as of 11/1
Slide 4: Overview of Leading EdTech Investor (Prosus)
4 • Top ten global consumer internet company / Largest listed in Europe by asset value • Leadership position across countries on five continents ‒ Early investor in Tencent and OLX • Listed by Naspers on Euronext Amsterdam in September 2019 under ticker PRX ‒ Part of the Euro Stoxx 50 index ‒ Market
Slide 5: Creating the new Skillsoft: combined transaction summary
5 Creating the new Combined Valuation multiples (1) • Revenue: 2.2x • Adj. EBITDA: 7.6x • Levered Free Cash Flow: 5.6x Purchase price • Skillsoft ~$1.3B • Global Knowledge ~$233M Capital structure • $ 530 M PIPE (2) • N et debt of ~$ 115 M, 0.6 x Adj. EBITDA (2,3,4) Ownership (2,5) • Churchi
Slide 6: Significant value creation opportunity for investors
6 5.6x 16.3x 74.4x 20.3x 7.6x 13.3x 106.7x 15.6x 2.2x 4.5x 5.2x 5.8x Significant value creation opportunity for investors Skillsoft’s implied value is at a significant discount to its peers on revenue m ultiples The Company is u nique in its high cash flow g eneration u nlike many of its peers Equit
Slide 7: Creating the new Skillsoft as the world's leading digital corporate learning company
7 We are creating the new Skillsoft as the world’s leading digital corporate learning company Source: Churchill estimates. (1) Pro forma for Churchill transaction with Skillsoft and Global Knowledge. Midpoint of estimated range; reflects FYE 1/31/23E financials. New Attractive Investment Lea
Slide 8: The corporate learning market is large, growing and fragmented
8 The corporate learning market is large, growing and fragmented No other corporate digital learning business with >$500m of revenue Large market Growing market Fragmented market Addressable market Source: Third - party consultant market research report, Tyton Partners, Grand View Resear
Slide 9: Standalone Skillsoft: leading provider of digital corporate learning content and tools
9 Standalone Skillsoft is a leading provider of comprehensive digital corporate learning content and tools Comprehensive source of digital learning content E xpansive customer base and relationships with CHROs and CLOs New Percipio platform supports more immersive learning and engagement with
Slide 10: Standalone Global Knowledge: world leader in IT and business skills training
10 Standalone Global Knowledge is a world leader in IT and business skills training Chosen IT trainer by most leading technology equipment and software suppliers Authorized and non - authorized content Hands - on, experiential learning led by expert instructors Available in the classroom, vi
Slide 11: The new Skillsoft will be an industry leader in size, content, and impact
12 The new Skillsoft will be an industry leader in size, content, and impact Limited hands - on training Inconsistent customer experience Sub $500M revenue Negative EBITDA Limited breadth Variable depth Impact Size Content ~ $700M CY22E PF Revenue 1 ~$200M CY22E PF Adj, EBITD
Slide 12: The new Skillsoft will have expansive reach
13 The new Skillsoft will have expansive reach Sample of customers of combined company (1) Business customers include government. 160+ Countries worldwide >70% Of Fortune 1000 ~ 45M Learners worldwide ~600 Combined sales force 13 ~98 % Revenue from business customers 1
Slide 13: Leading positions across segments
14 Technology & Developer Leadership & Business Compliance #1 #2 #2 Skillsoft’s market position: Competitive Landscape: #1 Global leader The new will be the digital corporate learning leader, with leading positions across segments Note: Skillsoft market shares for self - paced online digital learn
Slide 14: Both companies at inflection point and positioned for growth
15 Both companies at inflection point and positioned for growth Present: Intersecting inflection points 2010 - 2020: Roadblocks and competitive pressures 1995 - 2010: Formation and growth Accelerated virtual adoption Launched on - demand subscriptions Expanded into foundational and pract
Slide 15: Percipio platform is the technological foundation for future growth
16 Percipio platform is the technological foundation for future growth Source: Percipio.com, Skillsoft financials (1) Compared to Skillsoft legacy platform; increase in retention varies by quarter. u p to 29 pt Increase in retention 1 4x More learning hours 1 16 Why customers choose Pe
Slide 16: The strength of Skillsoft has been driving customer wins
17 The strength of has been driving customer wins Company Description Win Type Competition Date Skillsoft Value Drivers $20B+ TEV company in the information technology sector Winback • LinkedIn Learning January 2020 • Learner - driven experience design of Percipio • Strength of new course design • P
Slide 17: Percipio is exhibiting strong momentum
18 94% 95% - 100% 96% - 102% 97% - 103% is exhibiting strong momentum Percipio vs. Legacy Platform Skillport Performance Comparison ($M) Note: Dual Deployment (DD) reflects customers who are paying for Percipio and Skillport platforms. Percipio reflects customers who are only paying for Percipio pro
Slide 18: Global Knowledge has stabilized with improved product mix
19 $6 $3 $5 $7 $19 $30 $37 $36 $39 $21 $6 $12 $64 $55 $48 $55 Q4 CY'19 Q1 CY'20 Q2 CY'20 Q3 CY'20 has stabilized with improved product mix Note: Information shown reflects FYE January 31st financials (e.g., FYE 1/31/21 shown for CY2020). (1) Order intake represents contracted sales commitments for t
Slide 19: Churchill-led investor group will accelerate the pivot to growth
20 Churchill - led investor group will accelerate the pivot to growth Partnership of Leading EdTech and Growth Investors Cash infusion supports investment in: Business optimization Mergers and acquisitions Product development and deployment Sales and marketing Talent and culture Cont
Slide 20: Churchill strategy to transform the new Skillsoft
21 Churchill strategy to transform the new Skillsoft Sales & marketing Complete sales transformation with staffing of customer acquisition teams Create integrated tech & dev sales team to cross - sell both companies’ offerings Increase marketing and product qualified lead generation Levera
Slide 21: Skillsoft will accelerate growth with strategic acquisitions
22 Skillsoft will accelerate growth with strategic acquisitions New use cases Learning content & tools Platform capabilities P ositioned as the best acquirer with Percipio platform Balance sheet Size of salesforce Customer base More than 1000 venture - backed tuck - in acquisition target
Slide 22: Financial Overview
23 Financial Overview 7 – 10% Sector Growth Run - Rate Achieved During 2023 Short - Term Metrics 23 – 27% Short - Term Adj. EBITDA Margin 6 30 – 35% Target Long - Term Adj. EBITDA Margin 75 – 85% Long - Term LFCF Conversion 0.6 x Net Leverage at Close 2,3 $535M Cash on Balance Sheet 3 23 Key Metri
Slide 23: Transaction Summary, Sources and Uses
24 Sources $ % Churchill Cash (IPO) $700 42.0% Issue Equity to Skillsoft S/H 285 17.1% Common Equity PIPE Cash 530 31.8% Cash from Skillsoft & GK Balance Sheet 61 3.7% Take Back Debt 90 5.4% Total Sources $1,666 100.0% Uses $ % Cash Paid to Skillsoft S/H $505 30.3% Issue Equity to Skillsoft S/H 285
Slide 24: Creating the new Skillsoft as the world's leading digital corporate learning company
We are creating the new skillsoft” as the world’s leading digital corporate learning company 5 6 New skillsoft® Leader in large, growing, fragmented market with strong secular tailwinds Most comprehensive content, tools and modalities Wide reach serving >70% of Fortune 1000 with 600 person sales for
Slide 25: Appendix
26 Appendix
Slide 26: Jeff Tarr to lead the new Skillsoft
27 $476 $1,075 2005A 2010A $340 $900 2011A 2017A Jeff Tarr to lead the new Transformational executive with a track record of success building tech - enabled services companies into trusted industry leaders . Execution Experience Board Experience • Over last two decades, has built three publicly trad
Slide 27: Order intake, revenue and Adj. EBITDA by calendar year
28 Calendar Year 2018A 2019A 2020E 2021E 2022E Skillsoft Order Intake: Content $365 $347 $310 - $320 SumTotal 149 138 115 - 120 Total Skillsoft Order Intake $513 $485 $425 - $440 $435 - $450 $465 - $495 Global Knowledge Order Intake: Classroom Training and Other $187 $171 $45 - $50 Digital Offerings
Slide 28: Financial Summary
29 Financial Summary Note: CY2020 decline primarily due to decline in classroom revenue at Global Knowledge as a result of COVID - 19, customer churn f rom Skillsoft legacy platform, and other impacts mainly attributable to COVID - 19. Product level view of Order Intake / Revenue f or Skillsoft Cont
Slide 29: Financial Summary (Cont'd)
31 Financial Summary (Cont’d) Note: CY2020 decline primarily due to decline in classroom revenue at Global Knowledge as a result of COVID - 19, customer churn f rom Skillsoft legacy platform, and other impacts mainly attributable to COVID - 19. Reconciliation of non - GAAP financial measures provide
Slide 30: Summary of Shares Outstanding at Various Prices
32 Summary of Shares Outstanding at Various Prices (Shares in M) Commentary Churchill Public Shares: • Includes 69.0M public IPO shares • Includes 23.0M public warrants issued in connection with the IPO ‒ Strike price of $11.50 / share and forced redemption price of $18.00 / share Total Shares Outst
Slide 31: Reconciliation of Non-GAAP Financial Measures
33 Reconciliation of Non - GAAP Financial Measures Pro Forma Adj. EBITDA Reconciliation ($M ) Note: The above unaudited pro forma non - GAAP financial results present the combined results of Skillsoft and Global Knowledge, a ssuming that they had been consolidated for the full LTM periods ended 1/31