CPA Global’s $6.8 Billion Combination with Clarivate

Davis Polk & Wardwell LLP served as legal advisor to Clarivate, while Latham & Watkins LLP served as legal advisor to CPA Global.

CPA Global, a portfolio company of Leonard Green & Partners and leader in intellectual property software and tech-enabled services, entered into its definitive agreement to combine with Clarivate Plc, a leader in providing trusted information and insights to accelerate the pace of innovation.

In the all-stock transaction, CPA Global shareholders will receive approximately 218 million Clarivate ordinary shares, representing approximately 35% pro forma fully diluted ownership of Clarivate. Based on the 30-day volume weighted average share price of Clarivate, the implied enterprise value is approximately US$6.8 billion. The transaction, which is subject to customary closing conditions, including regulatory approvals, is expected to close during the fourth quarter of 2020.

In connection with the transaction, Clarivate intends to refinance CPA Global’s debt and has secured a $1.5 billion fully committed incremental term loan facility led by Citi and Bank of America. Clarivate expects to obtain long-term financing with a new debt issuance before the closing of the transaction.

CPA Global’s majority owner, Leonard Green & Partners (“LGP”), will have the right to appoint two directors to the Clarivate board, which is expected to increase the Clarivate board from 11 to 13 members. Certain CPA Global shareholders, including funds advised by majority owner LGP along with funds advised by Castik Capital and Partners Group, will be locked-up from selling their Clarivate shares until October 1, 2021.

Evercore served as lead financial advisor to Clarivate. Goldman Sachs served as lead financial advisor to CPA Global.

The Latham deal team for CPA Global was led by New York corporate partners Howard Sobel (Picture), John Giouroukakis, and Eyal Orgad, and London corporate partners David Walker and Linzi Thomas, with New York associates Thomas Engelhardt and Adam Rosenthal, and London associates Antonina Semyachkova, Faris Shoubber, and Jennifer Cadet. Advice was also provided on tax matters by Chicago partner Joseph Kronsnoble, Washington, D.C. partner Nicholas DeNovio, and London partner Sean Finn, with Chicago associate Michael Zucker; on SEC matters by New York partner Gregory Rodgers and Washington, D.C. partner Alexander Cohen, with Washington, D.C. associate William Hackett and New York associate Will Clark; on intellectual property matters by London partner Deborah Kirk; on benefits and compensation matters by Washington, D.C. partner Matthew Conway and London partner Sarah Gadd, with New York associate Max Raskin; on finance matters by New York partner Joshua Tinkelman, with New York associate Jake Burne; and on antitrust matters by San Diego partner Hanno Kaiser, London partner John Colahan and Brussels partner Hector Armengod.

The Davis Polk corporate team advising Clarivate included partners Joseph A. Hall and Daniel Brass and associates Michael Gilson and Rachel Schlosser. Associate Dan Gibbons is providing capital markets advice. The finance team includes partner Sartaj Gill and associate Jack Orford. Partner Michael Mollerus is providing tax advice. Partner Kyoko Takahashi Lin is providing executive compensation advice. Partner Jesse Solomon is providing antitrust and competition advice.

Involved fees earner: Daniel Brass – Davis Polk & Wardwell; Dan Gibbons – Davis Polk & Wardwell; Sartaj Gill – Davis Polk & Wardwell; Michael Gilson – Davis Polk & Wardwell; Joseph Hall – Davis Polk & Wardwell; Michael Mollerus – Davis Polk & Wardwell; Jack Orford – Davis Polk & Wardwell; Rachel Schlosser – Davis Polk & Wardwell; Jesse Solomon – Davis Polk & Wardwell; Kyoko Takahashi Lin – Davis Polk & Wardwell; Héctor Armengod – Latham & Watkins; Jake Burne – Latham & Watkins; Jennifer Cadet – Latham & Watkins; Will Christian Clark – Latham & Watkins; Alexander Cohen – Latham & Watkins; John Colahan – Latham & Watkins; Matthew Conway – Latham & Watkins; Nicholas DeNovio – Latham & Watkins; Thomas Engelhardt – Latham & Watkins; Sean Finn – Latham & Watkins; Sarah Gadd – Latham & Watkins; John Giouroukakis – Latham & Watkins; William Hackett – Latham & Watkins; Hanno Kaiser – Latham & Watkins; Deborah Kirk – Latham & Watkins; Joseph Kronsnoble – Latham & Watkins; Eyal Orgad – Latham & Watkins; Max Raskin – Latham & Watkins; Gregory Rodgers – Latham & Watkins; Adam Rosenthal – Latham & Watkins; Antonina Semyachkova – Latham & Watkins; Faris Shoubber – Latham & Watkins; Howard Sobel – Latham & Watkins; Linzi Thomas – Latham & Watkins; Joshua Tinkelman – Latham & Watkins; David Walker – Latham & Watkins; Michael Zucker – Latham & Watkins;

Law Firms: Davis Polk & Wardwell; Latham & Watkins;

Clients: Clarivate Analytics; CPA Global;

Author: Ambrogio Visconti