Clarivate To Buy ProQuest For $5.3 Bln; Confirms Standalone FY21 View

Clarivate plc (CLVT), a provider of trusted information and insights to accelerate the pace of innovation, announced Monday a definitive agreement to acquire ProQuest, a software, data and analytics provider to academic, research and national institutions. The consideration for the acquisition is $5.3 billion, including refinancing of ProQuest debt.

The consideration comprises approximately $4.0 billion in cash and $1.3 billion of equity.

Clarivate is buying ProQuest from Cambridge Information Group, a family-owned investment firm, and other partners including Atairos.

The acquisition is expected to be double-digit accretive to Clarivate earnings in 2022 and mid-teens accretive in 2023.

The transaction, which is subject to customary closing conditions, including regulatory approvals, is expected to close during the third quarter of 2021.

ProQuest delivers content and technology solutions to over 25,000 academic, corporate and research organizations in more than 150 countries. For 2020, ProQuest generated $876 million of revenue, 4 percent from organic growth, and $250 million of Adjusted EBITDA.

The acquisition is expected to provide significant cost synergies, which, in addition to revenue synergies, would drive both ProQuest and Clarivate Adjusted EBITDA growth and expand ProQuest's Adjusted EBITDA margin.

The acquisition is expected to establish Clarivate as a premier provider of end-to-end research intelligence solutions. The deal will significantly expand its content and data offerings as the addition of ProQuest will materially complement the Clarivate Research Intelligence Cloud.

Upon completion of the transaction, two members of the ProQuest Board will join the Clarivate Board. This includes Andy Snyder, who will have the position of Vice Chairman of the Clarivate Board, and Michael Angelakis, Chairman and CEO of Atairos.

In addition, Clarivate reaffirmed standalone 2021 outlook. For the year 2021, excluding the combination with ProQuest, Clarivate continues to expect adjusted revenues in a range of $1.79 billion to $1.84 billion, adjusted EBITDA in a range of $790 million to $825 million, adjusted EBITDA margins in a range of 44 percent to 45 percent, and adjusted earnings per share in a range of $0.74 to $0.79.

Clarivate will provide an updated 2021 outlook to include the acquisition of ProQuest after closing of the transaction, which is expected to occur in the third quarter of 2021.

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