Special purpose acquisition company Churchill Capital Corp II announced today that it has entered into a definitive agreement to acquire Skillsoft Ltd. in a transaction valued at approximately $1.3 billion and that it also entered into an agreement to acquire Global Knowledge Training LLC for roughly $233 million, according to a press release. An investor call will take place today at 4:30 p.m. ET.
As part of the transaction, Churchill Capital Corp II, or Churchill II, will contribute up to $697 million raised during its IPO. The company expects to raise more than $170 million in common equity through private investment in public equity commitments, including from Prosus, which has committed to invest $100 million.
Churchill II will acquire Global Knowledge from Rhone Capital for a consideration of 6 million warrants at an exercise price of $11.50 per share in the combined company. The investment funds affiliated with Rhone Capital have also agreed to invest $50 million in additional class A common stock at $10 per share.
Upon close, Churchill II shareholders are expected to hold approximately 65% of the combined company, while Skillsoft shareholders and private investment in public equity investors will hold about 22% and 13%, respectively. The transaction is expected to close in January 2021, subject to approval by Churchill II and Skillsoft shareholders. The combined company will operate as Skillsoft and will be listed on the New York Stock Exchange.
Skillsoft successfully emerged from Chapter 11 on Aug. 27 after entering into a restructuring support agreement with a majority of its first- and second-lien lenders and filing Chapter 11 on June 14 to implement the RSA and delever its balance sheet. Global Knowledge was downgraded to D by S&P Global Ratings in June after the company missed an interest payment due March 31 on its revolver and first- and second-lien term loans. The company entered a forbearance agreement with its term loan lenders May 7 that went through Sept. 30.
Global Knowledge has a $166 million first-lien term loan due 2021 (L+550, 1% Libor floor) and a $50 million second-lien term loan due 2022 (L+950, 1% Libor floor) that are both rated D by S&P Global Ratings following the missed interest payments. Skillsoft exited Chapter 11 with a $410 million take-back second-out first-lien term loan due April 2025 (L+750, 1% Libor floor) and a $110 million first-out exit term loan (L+750, 1% Libor floor) due December 2024.
The combined company will have net debt of $463 million, or 2.3x adjusted EBITDA.
Skillsoft delivers online learning, training and talent solutions. Global Knowledge provides IT and business skills-training services in the U.S. and internationally.