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Item 1.01
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Entry into a Material Definitive Agreement.
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3.875% Senior Secured Notes due 2028
4.875% Senior Notes due 2029
On June 24, 2021, Clarivate Science Holdings Corporation
(the “Issuer”), an indirect, wholly-owned subsidiary of Clarivate Plc (the “Company”) entered into (i) an indenture
(the “Secured Notes Indenture”) with Wilmington Trust, National Association, as trustee (the “Secured Notes Trustee”)
and as collateral agent, in connection with the issuance and sale of $1,000,000,000 aggregate principal amount of the Issuer’s 3.875%
senior secured notes due 2028 (the “Secured Notes”), and (ii) an indenture (the “Unsecured Notes Indenture” and,
together with the Secured Notes Indenture, the “Indentures”) with Wilmington Trust, National Association, as trustee (the
“Unsecured Notes Trustee” and, together with the Secured Notes Trustee, the “Trustees”), in connection with the
issuance and sale of $1,000,000,000 aggregate principal amount of the Issuer’s 4.875% senior notes due 2029 (the “Unsecured
Notes” and, together with the Secured Notes, the “Notes”). The issuance and sale of the Notes is referred to herein
as the “Offering.”
The Notes are being issued in connection with
the Company’s proposed acquisition (the “Acquisition”) of ProQuest LLC and its subsidiaries (collectively, “ProQuest”),
previously announced on May 17, 2021. The Issuer will deposit the gross proceeds of the Offering into segregated escrow accounts until
the date that certain escrow release conditions (the “Escrow Release Conditions”), including the consummation of the Acquisition,
are satisfied. The Notes will be subject to special mandatory redemption if the Escrow Release Conditions have not been satisfied by November
8, 2021 (the “Escrow End Date”), if the transaction agreement with ProQuest is terminated or the Issuer notifies the Trustees
and Citibank, N.A., as escrow agent, that the Company is no longer pursuing the Acquisition.
Upon the satisfaction of the Escrow Release Conditions,
the net proceeds of the Offering will be released from the escrow accounts (the “Escrow Release Date”) and used to fund a
portion of the purchase price of the Acquisition.
Interest; Maturity
Interest on the Secured Notes will accrue at a
rate of 3.875% per year, payable semi-annually in cash in arrears on June 30 and December 30 of each year, commencing December 30, 2021.
The Secured Notes will mature on June 30, 2028.
Interest on the Unsecured Notes will accrue at
a rate of 4.875% per year, payable semi-annually in cash in arrears on June 30 and December 30 of each year, commencing December 30, 2021.
The Unsecured Notes will mature on June 30, 2029.
Guarantees; Ranking; Security
Prior to the closing of the Acquisition and the
Escrow Release Date, the Notes will not be guaranteed, but will be the Issuer’s senior secured obligations, secured by a first-priority
security interest in the applicable escrow account and all deposits and investment property therein.
From and after the Escrow Release Date, the Notes
of each series will be guaranteed by the Company’s indirect wholly-owned subsidiary Camelot UK Holdco Limited (“Holdings”),
Holdings’ direct wholly-owned subsidiary Camelot UK Bidco Limited (“UK Holdco”) and each of UK Holdco’s restricted
subsidiaries (other than the Issuer) that guarantees or incurs indebtedness under the Credit Facility (as defined below) on such date
(collectively, the “Guarantors”). The Notes of each series and the guarantees will rank senior in right of payment to all
of the Issuer’s and the Guarantors’ future subordinated indebtedness and other obligations that expressly provide for their
subordination to the Notes and the related guarantees and will be structurally subordinated to the existing and future indebtedness, claims
of holders of preferred stock and other liabilities of any subsidiary of UK Holdco that is not a guarantor or issuer of the Notes.
From and after the Escrow Release Date, the Secured
Notes will be the Issuer’s and the Guarantors’ senior (and, following the grant of security interests, secured) obligations,
and the Secured Notes and the related guarantees will rank equally in right of payment with all of the Issuer’s and Guarantors’
existing and future senior indebtedness, effectively pari passu in right of priority as to the collateral that secures the Secured
Notes with respect to any other first-priority lien obligations of the Issuer and the Guarantors, and effectively senior to all existing
and future indebtedness of the Issuer that is not secured by a lien on such collateral (including the Unsecured Notes), to the extent
of the value of such collateral. After the Escrow Release Date and the grant of security interests, the Secured Notes will, subject to
permitted liens and other exceptions, be secured by liens on a first-priority basis on substantially all of the Issuer’s and the
Guarantors’ tangible and intangible assets, then owned or thereafter acquired, that secure borrowings under that certain Credit
Agreement entered into on October 31, 2019 by certain of the Company’s subsidiaries as borrowers and guarantor, the financial institutions
named therein and Bank of America, N.A., as administrative agent (as amended or supplemented, the “Credit Facility”). The
security interests in the collateral securing the Secured Notes will not be required to be in place on the Escrow Release Date, but the
Issuer will be required to use commercially reasonable efforts to cause such security interests to be put in place no later than (x)
30 days after the Escrow Release Date with respect to assets located in the United States owned by the Issuer and Guarantors organized
in the United States and (y) 120 days after the Escrow Release Date with respect to other assets.
From and after the Escrow Release Date, the Unsecured
Notes will be the Issuer’s and the Guarantors’ senior unsecured obligations, and the Unsecured Notes and the related guarantees
will rank equally in right of payment with all of the Issuer’s and Guarantors’ existing and future senior indebtedness, effectively
subordinated to any of the Issuer’s and the Guarantors’ existing and future secured indebtedness to the extent of the value
of the collateral securing such indebtedness.
Optional Redemption
The Notes will be redeemable on or after June
30, 2024 at the redemption prices specified in the applicable Indenture. The Notes may also be redeemed at any time prior to June 30,
2024, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus an applicable premium set forth in
the Indenture, and accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, at any time prior to June
30, 2024, the Issuer may redeem in the aggregate up to 40% of the principal amount of the Notes of each series with funds in an aggregate
amount not exceeding the net cash proceeds from certain equity offerings, subject to certain conditions.
Change of Control
If UK Holdco or the Issuer experiences specific
kinds of changes of control, the Issuer will be required to offer to repurchase the Notes at 101% of their principal amount, plus accrued
and unpaid interest, if any, to, but not including, the date of purchase; provided, that if a change of control occurs prior to the Escrow
Release Date, the Issuer will not be required to make an offer to repurchase the Notes until after the Escrow Release Date.
Covenants; Events of Default
Following the Escrow Release Date, each Indenture
will limit, among other things, the ability of UK Holdco and its restricted subsidiaries to:
• incur additional indebtedness;
• pay dividends on, redeem or repurchase
capital stock;
• make certain restricted payments and investments;
• create certain liens;
• impose restrictions on the ability of subsidiaries
to pay dividends or other payments to UK Holdco or any of its restricted subsidiaries;
• transfer, lease or sell certain assets;
• merge or consolidate with other entities;
• enter into certain transactions with affiliates;
• designate restricted and unrestricted subsidiaries;
and
• provide guarantees of other debt.
Each Indenture will also limit the ability of
Holdings to conduct certain activities. Each of the covenants is subject to certain exceptions and qualifications as set forth in the
applicable Indenture. In addition, if and for so long as the applicable Notes have an investment grade rating from Moody’s and S&P,
and no default exists under the Indenture governing such series of Notes, the Issuer and the Guarantors will not be subject to certain
of the covenants listed above under the Indenture governing such series of Notes.
Each Indenture also contains customary provisions
for events of default, including, among others, for failure to pay principal or interest when due and payable; failure to comply with
covenants or agreements in the applicable Indenture or Notes and failure to cure or obtain a waiver of such default upon notice; a default
under certain other indebtedness, the maturity of which has been accelerated; and certain events of bankruptcy, insolvency or reorganization.
In the case of an event of default, the principal amount of the Notes plus accrued and unpaid interest may be accelerated.
Indentures and Notes
The description of the Notes and the Indentures
in this Current Report on Form 8-K (this “Current Report”) are summaries, and are qualified in their entirety by reference
to the complete terms of the Indentures and the forms of Notes included therein. The Indentures and the forms of Notes are filed hereto
as Exhibits 4.1 through 4.4, respectively, and are incorporated by reference herein.