NEW YORK, July 12, 2020 /PRNewswire/ -- Churchill
Capital Corp III ("Churchill") (NYSE: CCXX), a public investment
vehicle, and MultiPlan, Inc. ("MultiPlan"), a market-leading,
technology-enabled provider of end-to-end healthcare cost
management solutions, announced today that they have entered into a
definitive agreement to merge. The combined company will operate as
MultiPlan and will be listed on the NYSE. The transaction implies
an initial enterprise value for MultiPlan of approximately
$11 billion or approximately 12.9x
estimated 2021 Adjusted EBITDA. The transaction will bring to
MultiPlan up to $3.7 billion of new
equity or equity linked capital to substantially reduce its debt
and fund new value-added services.
MultiPlan will continue to operate its business with a
relentless focus on delivering service excellence to its payer
customers. The existing management team, led by long-standing CEO
Mark Tabak, CFO David Redmond and Chief Revenue Officer
Dale White, will continue to lead
the business, and Hellman & Friedman affiliates ("H&F")
will remain MultiPlan's largest shareholder.
The capital from this transaction, combined with Churchill's
expertise, will enable MultiPlan to continue to enhance its core
offerings to payers through a significant increase in its data
analytics platform, extend into new payer customer segments and
expand its platform, increasing the value MultiPlan provides to
more than 700 payers, their 60 million consumers and MultiPlan's
1.2 million providers that serve them. Further, the transaction
will better position MultiPlan to capitalize on the entire
$50 plus billion total addressable
market, rather than its current subset of $8
billion, organically and through M&A.
Mark Tabak, CEO of MultiPlan,
stated, "I'm tremendously proud of the role MultiPlan plays in
driving order, efficiency and fairness in healthcare payments. This
transaction allows us to create payer value beyond the tech-enabled
cost management and payment integrity services we offer today. As a
public company, MultiPlan will have greater strategic and financial
flexibility, making it better equipped to expand organically,
through adjacent acquisitions and by investing in new technologies.
We will deliver even more value for healthcare payers in
particular, but also for their consumers and providers."
Allen Thorpe, Partner at Hellman
& Friedman, said, "MultiPlan's performance as a privately held
company has been outstanding. This transaction strengthens the
Company and will allow it to further penetrate the broad and
fast-growing healthcare market, driving efficiencies and cost
savings that benefit the sector and deliver great outcomes for
payers, providers and consumers." He further added, "We are excited
to join forces with the Churchill team and continue our partnership
with MultiPlan to deliver value for its many customers."
"We are pleased to partner with MultiPlan to drive its next
phase of growth. MultiPlan is on the right side of healthcare,
significantly reducing costs to insurers, employers and consumers,"
said Michael S. Klein, Chairman and
CEO of Churchill. "MultiPlan has an unmatched, long-term track
record of customer satisfaction and delivering high returns to
investors. This transaction will enable the Company to enhance its
capital structure and position it for substantial incremental
growth. MultiPlan fits perfectly with Churchill's core mission to
provide intellectual and financial capital to power the growth of
great, market leading companies who operate in attractive
industries, and can succeed more rapidly in the public markets with
increased capital and the benefit of Churchill's Operating and
Strategic Partners."
MultiPlan pioneered innovative and mission-critical transaction
processing services for healthcare payers, including the industry's
largest independent preferred provider network, that reduce medical
spend, improve payment accuracy and advance their competitive
position. MultiPlan's data- and technology-driven services leverage
the Company's 40 years of claim data, national reach, expansive
provider network, strong relationships, innovative intellectual
property and modern scale technology platform to create value for
all stakeholders in the healthcare ecosystem. Further, MultiPlan
brings affordability and fairness, delivering approximately
$19 billion in medical cost reduction
on over 135 million claims – bringing savings to payers and
consumers alike.
Churchill Capital Corp III is a NYSE listed, $1.1 billion, equity growth investment company
and is the third vehicle in the Churchill Capital group of
companies. Churchill's strategy is to identify and complete initial
business combinations with unique, leading companies in growing
industries that will be catalyzed by the growth capital and
transparency of the public equity markets and will be enhanced by
the experience and expertise of Churchill's Operating and Strategic
Partners, a group of leading Fortune 500 CEOs with
exceptional shareholder value creation track records who invest
directly in Churchill and are committed to assist MultiPlan in its
next phase of growth.
Summary of Transaction
Churchill will contribute up to $1.1
billion of cash raised during its initial public offering in
February 2020. Further, additional
investors have committed to participate in the transaction through
PIPE commitments to a $2.6 billion
new private capital raise consisting of a $1.3 billion common stock at $10 per share and $1.3
billion of 6 percent interest convertible debt, with a
conversion price of $13 per share.
The convertible debt provides flexible capital, including a
non-cash pay option.
The total investment of up to $3.7
billion raised in this transaction will be used to pay down
existing debt, purchase a portion of the equity owned by existing
MultiPlan shareholders and capitalize the MultiPlan balance
sheet. As a result of this transaction, MultiPlan's leverage
will be significantly reduced and its existing Net Debt to Adjusted
EBITDA ratio will be reduced from 6.8x to approximately 5.8x with
its Net Debt to Adjusted EBITDA at the operating company level
decreasing to 4.1x1. The additional capital and public
stock currency will allow the Company to advance its strategy of
investing in organic and acquisition growth, and to increase its
investment in data, machine learning and artificial intelligence
technologies.
In connection with the transaction, Churchill's sponsor has
entered into an agreement to amend the terms of its founder equity
to align with the long-term value creation and performance of
MultiPlan. Churchill 's sponsor has agreed that a portion of its
equity will vest only if the share price of the Company exceeds
$12.50 per share over a period
between the first and fifth anniversaries of the closing of the
transaction, and have agreed not to transfer unvested
equity. Churchill has received commitments from its investors
and the new PIPE investors for funding that is sufficient to close
the transaction.
The Boards of Directors of both Churchill and MultiPlan have
unanimously approved the proposed transaction.
The transaction is expected to be completed by the end of
October 2020, subject to approval by
Churchill stockholders representing a majority of the outstanding
Churchill voting power, the expiration of the HSR Act waiting
period and other customary closing conditions.
Conference Call Information
MultiPlan and Churchill's investor conference call and
presentation discussing the transaction will take place at 8:00am
EST on Monday July 13, 2020. You can
pre-register for this conference call by visiting this link. You
will then receive a link to the presentation. A transcript of the
call will also be filed by Churchill Capital Corp III with the
SEC.
Investor Presentation
A link to the company's investor presentation can be found at
https://iii.churchillcapitalcorp.com/churchill-3-investor-presentation.
Advisors
Citigroup is serving as the private placement agent and capital
markets advisor to Churchill. Citigroup and Goldman Sachs served as
financial advisors and Weil, Gotshal & Manges LLP served as
legal counsel to Churchill. Credit Suisse served as a capital
markets advisor to Churchill. Citigroup and Goldman Sachs were
joint book running managers for Churchill Capital Corp III.
Centerview Partners, Barclays, BofA Securities and UBS
Investment Bank served as financial advisors to MultiPlan. Kirkland
& Ellis and Simpson Thacher & Bartlett served as legal
counsel to MultiPlan and H&F.
About MultiPlan
MultiPlan is committed to helping healthcare payers manage the
cost of care, improve their competitiveness and inspire positive
change. Leveraging sophisticated technology, data analytics, and a
team rich with industry experience, MultiPlan interprets clients'
needs and customizes innovative solutions that combine its payment
integrity, network-based and analytics-based services. MultiPlan is
a trusted partner to over 700 healthcare payers in the commercial
health, dental, government and property and casualty markets, and
saves these companies approximately $19
billion annually. MultiPlan is owned by Hellman &
Friedman and other investors. For more information,
visit multiplan.com.
About Churchill Capital Corp III
Churchill Capital Corp III is a public investment vehicle formed
for the purpose of effecting a merger, acquisition, or similar
business combination. Churchill III was founded by a group of
leading current and former business and financial leaders.
Churchill III's securities are traded on the New York Stock
Exchange under ticker symbols CCXX, CCXX WS and CCXX.U. The Company
raised $1.1 billion of cash proceeds
in an initial public offering in February
2020. Churchill's first public equity investment company,
Churchill Capital Corp, led by Jerre
Stead, merged with Clarivate Analytics, a leading provider
of comprehensive intellectual property and scientific information,
analytical tools, and services in May
2019. Churchill Capital Corp II is actively pursuing an
initial business combination target in any business or industry.
For more information, visit iii.churchillcapitalcorp.com
About Hellman & Friedman
Hellman & Friedman (H&F) is a preeminent global private
equity firm with a distinctive investment approach focused on
large-scale equity investments in high-quality growth
businesses. H&F seeks to partner with world-class
management teams where its deep sector expertise, long-term
orientation, and collaborative partnership approach enable
companies to flourish. H&F targets outstanding businesses
in select sectors including software & technology,
financial services, healthcare, retail & consumer, and other
business services. Founded in 1984, H&F has raised over
$50 billion of committed capital,
invested in over 90 companies, manages $49
billion of assets under management (as of 12/31/19) and is
investing its ninth fund, with $16.5
billion of committed capital. Learn more about H&F's
defining investment philosophy and approach to sustainable outcomes
at www.hf.com.
Forward Looking Statements
This press release includes "forward looking statements" within
the meaning of the "safe harbor" provisions of the United States
Private Securities Litigation Reform Act of 1995. Terms such as
"anticipate," "believe," "will," "continue," "could," "estimate,"
"expect," "intend," "may," "might," "plan," "possible,"
"potential," "predict," "should," "would," or similar expressions
may identify forward-looking statements, but the absence of these
words does not mean the statement is not forward-looking. Such
forward looking statements include estimated financial information.
Such forward looking statements with respect to revenues, earnings,
performance, strategies, prospects and other aspects of the
businesses of Churchill, MultiPlan or the combined company after
completion of the business combination are based on current
expectations that are subject to known and unknown risks and
uncertainties, which could cause actual results or outcomes to
differ materially from expectations expressed or implied by such
forward looking statements.
Actual events or results may differ materially from those
discussed in forward-looking statements as a result of various
risks and uncertainties, including: the occurrence of any event,
change or other circumstances that could give rise to the
termination of the merger agreement; the inability to complete the
transactions contemplated by the transaction agreement due to the
failure to obtain approval of the stockholders of Churchill or
other conditions to closing in the merger agreement; the ability to
meet applicable listing standards following the consummation of the
transactions contemplated by the merger agreement; the risk that
the proposed transaction disrupts current plans and operations of
MultiPlan as a result of the announcement and consummation of the
transactions contemplated by the merger agreement; the ability to
recognize the anticipated benefits of the proposed business
combination, which may be affected by, among other things,
competition, the ability of the combined company to grow and manage
growth profitably, maintain relationships with customers and
suppliers and retain its management and key employees; costs
related to the proposed business combination; changes in applicable
laws or regulations; the possibility that Churchill, MultiPlan or
the combined company may be adversely affected by other political,
economic, business, and/or competitive factors; the impact of
COVID-19 and its related effects on Churchill, MultiPlan or the
combined company's projected results of operations, financial
performance or other financial metrics; and other risks and
uncertainties indicated from time to time in the final prospectus
of Churchill for its initial public offering, including those under
"Risk Factors" therein, and other documents filed or to be filed
with the SEC by Churchill. Forward-looking statements speak only as
of the date made and, except as required by law, Churchill and
MultiPlan undertake no obligation to update or revise these
forward-looking statements, whether as a result of new information,
future events or otherwise. Anyone using the presentation does so
at their own risk and no responsibility is accepted for any losses
which may result from such use directly or indirectly. Investors
should carry out their own due diligence in connection with the
assumptions contained herein. The forward-looking statements in
this press release speak as of the date of this press release.
Although Churchill may from time to time voluntarily update its
prior forward-looking statements, it disclaims any commitment to do
so whether as a result of new information, future events, changes
in assumptions or otherwise except as required by securities laws.
For additional information regarding these and other risks faced by
us, refer to our public filings with the Securities and Exchange
Commission ("SEC"), available on the SEC's website at
www.sec.gov.
Non-GAAP Financial Measures
EBITDA, Adjusted EBITDA and the ratio of net debt to Adjusted
EBITDA are examples of supplemental non-U.S. GAAP measures of
MultiPlan's performance. Adjusted EBITDA represents net income
before interest expense, interest income, income tax provision,
depreciation, amortization of intangible assets and non-income
taxes ("EBITDA") adjusted to exclude miscellaneous non-operating
expenses, gain or loss on disposal of assets, management fees,
integration expenses, transaction related expenses, gain on
repurchase and retirement of notes, and non-cash compensation that
are included in net income for the period that MultiPlan does not
consider indicative of its ongoing operating performance, and
certain unusual items impacting results in a particular period to
more accurately reflect management's view of the recurring
profitability of the business. These measures are not measurements
of MultiPlan's financial performance under GAAP and should not be
considered in isolation or as alternatives to net income, net cash
flows provided by operating activities, total net cash flows or any
other performance measures derived in accordance with GAAP.
MultiPlan believes Adjusted EBITDA is an important supplemental
measure of MultiPlan's operating performance and a basis upon which
MultiPlan's management assesses performance rather than cash flow
measures. MultiPlan's management also believes Adjusted EBITDA is
useful to investors because it and similar measures are frequently
used by securities analysts, investors, and other interested
parties to evaluate MultiPlan's competitors and provide additional
information regarding growth rates on a more comparable basis than
would be provided without such adjustments.
The use of Adjusted EBITDA instead of a U.S. GAAP measure has
limitations as an analytical tool, and you should not consider
Adjusted EBITDA in isolation, or as a substitute for analysis of
MultiPlan's results of operations and operating cash flows as
reported under GAAP. For example, Adjusted EBITDA:
- does not reflect MultiPlan's cash expenditures or future
requirements for capital expenditures;
- does not reflect changes in, or cash requirements for,
MultiPlan's working capital needs;
- does not reflect interest expense, or the cash requirements
necessary to service interest or principal payments, on MultiPlan's
debt;
- any cash income taxes that MultiPlan may be required to
pay;
- assets are depreciated or amortized over estimated useful lives
and often have to be replaced in the future, and Adjusted EBITDA
does not reflect any cash requirements for such replacements;
and
- all non-cash income or expense items that are reflected in
MultiPlan's statements of cash flows.
MultiPlan's definition of and method of calculating Adjusted
EBITDA may vary from the definitions and methods used by other
companies, which may limit their usefulness as comparative
measures. MultiPlan prepared the information included in this press
release based upon available information and assumptions and
estimates that it believes are reasonable. MultiPlan cannot assure
you that its estimates and assumptions will prove to be
accurate.
Additional Information
In connection with the proposed business combination, Churchill
will file with the SEC and furnish to Churchill's stockholders a
proxy statement and other relevant documents. This press release
shall not constitute an offer to sell or the solicitation of any
offer to buy any securities of Churchill or the solicitation of any
vote or approval, nor shall there be any sale of securities of the
Company in any state or jurisdiction, domestic or foreign, in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
state or jurisdiction. Stockholders are urged to read the proxy
statement when it becomes available and any other documents to be
filed with the SEC in connection with the proposed business
combination or incorporated by reference in the proxy statement
because they will contain important information about the proposed
business combination.
Investors will be able to obtain free of charge the proxy
statement and other documents filed with the SEC at the SEC's
website at http://www.sec.gov. Copies of the documents filed with
the SEC by Churchill when and if available, can be obtained free of
charge by directing a written request to Churchill Capital Corp
III, 640 Fifth Avenue, 12th Floor, New
York, NY 10019.
The directors, executive officers and certain other members of
management and employees of Churchill may be deemed "participants"
in the solicitation of proxies from stockholders of Churchill in
favor of the proposed business combination. Information regarding
the persons who may, under the rules of the SEC, be considered
participants in the solicitation of the stockholders of Churchill
in connection with the proposed business combination will be set
forth in the proxy statement and the other relevant documents to be
filed with the SEC. You can find information about Churchill's
executive officers and directors in Churchill's filings with the
SEC, including Churchill's final prospectus for its initial public
offering.
1 Assumes no redemptions.
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SOURCE MultiPlan, Inc.; Churchill Capital Corp III