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2021-10-27

Cint AB: Cint Group AB (publ) to acquire Lucid, intends to raise equity and has secured debt financing

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, NEW ZEALAND, SINGAPORE, HONG KONG, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE SUCH RELEASE, PUBLICATION OR DISTRIBUTION COULD BE UNLAWFUL OR WOULD REQUIRE REGISTRATION OR ANY OTHER MEASURES IN ACCORDANCE WITH APPLICABLE LAW.

Cint Group AB (publ) ("Cint" or the "Company") has today entered into an agreement with the shareholders of Lucid Holdings LLC ("Lucid") to acquire 100 percent of the stock in Lucid (the"Transaction") for a consideration of approximately USD 1,070 million on a cash- and debt- free basis, of which approximately USD 470 million is payable in newly issued Cint shares and approximately USD 580 million is payable in cash (the "Consideration"). Lucid is a leading insights and analytics company located in New Orleans, Louisiana, with additional offices in North America, EMEA, and APAC. The Transaction is of a transformational nature for Cint. Cint expects run-rate synergies from the Transaction of approximately EUR 40 million to be fully implemented within 24 months from closing of the Transaction. Following the Transaction, current shareholders of Lucid will together hold approximately 17 percent of the total number of outstanding shares and votes in Cint. To finance the cash part of the Consideration, Cint's Board of Directors intends to carry out a share issue of up to approximately USD 510 million directed to Swedish and international institutional investors through an accelerated bookbuilding procedure conducted by Carnegie and Danske Bank (the "Directed Share Issue"). In addition, Cint has secured USD 120 million of debt financing. The Transaction is conditional upon customary closing conditions, including regulatory approval and publication of a prospectus for admission for trading on Nasdaq Stockholm of new shares in Cint.

The Transaction in brief
  • The Transaction is in line with Cint's previously communicated strategy to extend its value proposition through M&A.
  • The Transaction is of a transformational nature for Cint and following completion of the Transaction, Cint's proforma financials for the period Jan-Sep 2021, including the recent acquisition of GapFish, will amount to approximately EUR 104 million revenue and EUR 22 million EBITDA.
  • The Consideration for 100 percent of the shares in Lucid on a cash- and debt- free basis amounts to approximately USD 1,070 million.

-          Approximately USD 470 million of the Consideration will be paid with 36 million newly issued Cint shares (the "Consideration Shares"), which, based on the closing price on Nasdaq Stockholm on 26 October 2021, corresponds to SEK 113 per Cint share.

-          Approximately USD 580 million of the Consideration will be paid in cash (the "Cash Consideration").

-     Net Debt and other purchase price adjustments amount to approximately USD 20 million.
  • The Cash Consideration will be financed through the capital raised via newly secured USD120 million debt financing (the "Debt Financing") and from the Directed Share Issue.

  • Cint's Board of Directors intends to carry out the Directed Share Issue in a total amount of up to approximately USD 510 million through an accelerated bookbuilding procedure, conducted by Carnegie and Danske Bank directed to Swedish and international institutional investors. 

-          The final outcome of the Directed Share Issue is intended to be announced before the commencement of trading on Nasdaq Stockholm on 28 October 2021.

-          The Directed Share Issue is intended to be made in two tranches. The first tranche of approximately USD 170 million is resolved upon by the Board of Directors based on the authorization from the Annual General Meeting held on 5 February 2021 and will be settled on or around 1 November 2021. The second tranche of approximately USD 340 million is subject to the closing conditions for the Transaction, including an Extraordinary General Meeting's approval, and is intended to be settled at closing of the Transaction.

-          The Debt Financing will be provided under a facilities agreement entered into between Cint and two Nordic banks. The term facility has a tenor of three years, with a possibility to extend the tenor for two additional years in one-year increments. 
  • In connection with the Transaction the board will propose the implementation of two new long-term incentive programs (the "LTIP"); one program specifically relating to the Transaction and the related synergies and one regular annual program that will be presented and resolved upon in connection with the Transaction rather than on the coming annual general meeting 2022.
  • A notice for an Extraordinary General Meeting will be sent out, to authorize the board to issue the Consideration Shares as well as approve of the board's resolution on the second tranche of the Directed Share Issue and the LTIP 2022 Meeting is intended to be held as soon as possible. A notice for the EGM will be sent out separately.
  • Shareholders representing approximately 51 percent of the capital and votes in Cint have committed to vote in favor of approving the resolutions relating to the Transaction at the Extraordinary General Meeting as well as for appointing the founder and CEO of Lucid, Mr. Patrick Comer as board member and chairman of Cint following closing of the Transaction as well as one additional representative of the sellers of Lucid as board member of Cint.
  • Current Cint CEO Tom Buehlmann will remain the CEO of the combined organization.
  • The Transaction is conditional upon customary closing conditions, including regulatory approval and publication of a prospectus for admission for trading on Nasdaq Stockholm of the new shares in Cint.
  • Closing of the Transaction is expected to occur by the end of 2021.

"Cint and Lucid are complementary leaders in the insights industry, helping insights-driven companies unlock substantial efficiencies across their value chains. Us coming together will be a transformational step change for Cint. The combined organisation will be a global leader in technology-enabled insights, and further strengthen Cint's current proven business model. I am thrilled to welcome Patrick Comer and the entire team at Lucid to the Cint family. Together we will continue to serve our industry's demand for digitalisation and the need for faster, more cost-effective, and scalable technology solutions."

Tom Buehlmann, CEO of Cint

"Cint and Lucid coming together is a validation of the programmatic marketplace and the entire Research Technology industry. We're excited to continue building towards our shared vision of the future. Our combined capabilities will empower our customers to discover more technology-enabled insights and better understand their target audiences."

Patrick Comer, Founder and CEO of Lucid

BACKGROUND AND REASONS

Cint is a global software leader in digital insights gathering. The Cint platform automates the insights gathering process so that companies can gain access to insights faster with substantial scale. Cint has one of the world's largest consumer networks for digital survey-based research, made up of over 145 million engaged respondents across more than 130 countries.

Lucid is a programmatic research technology platform that provides access to first-party survey data with respondents in over 100 countries. With its global community of sample buyers and suppliers, the Lucid Marketplace enables anyone, in any industry, to ask questions of online audiences and find the answers they need, fast. Founded in 2010, Lucid is headquartered in New Orleans, LA with offices throughout North America, EMEA, and APAC.

During the 9-month period ending on 30 September 2021, Lucid reached a net revenue, gross profit, and adjusted EBITDA of USD 85 million, USD 62 million and USD 7 million, respectively[1].

Today, Cint and the shareholders of Lucid have signed an agreement stipulating the conditions for the Transaction. The acquisition of Lucid will establish the combined group as a US and global leader in technology enabled insights, further strengthening Cint's driven platform. Furthermore, the Transaction will give Cint access to a highly competitive audience-tracking technology and offering. In addition, the analysis made by Cint indicates run-rate annual EBITDA synergy potential of EUR 40m to be fully implemented within 24 months of closing, with initial benefits in the first 6 months after closing. The full potential comes from a combination of growth, COGS and OPEX synergies.

PRELIMINARY UNAUDITED PRO FORMA FINANCIALS

A preliminary unaudited pro forma balance sheet per 30 September 2021 is presented below with the purpose of describing the financial situation after the Transaction. The pro forma consolidated balance sheet is solely intended to describe the hypothetical situation of the combined group as if the Transaction had been completed as of 30 September 2021. Note that Lucid thus far has had USD as its reporting currency and that an exchange rate of USD/EUR = 1.160 has been used[2]. Lucid will be acquired through a merger between a subsidiary of Cint, which is registered in Delaware.

+--------------------------------+---------+---------+-----------+---------+
|Amounts in EURm |Cint, |Lucid, |Adjustments|Combined,|
| |30 |30 | |30 |
| |September|September| |September|
| |2021 |2021 | |2021  |
+--------------------------------+---------+---------+-----------+---------+
|ASSETS | | | | |
+--------------------------------+---------+---------+-----------+---------+
|Non-current assets | | | | |
+--------------------------------+---------+---------+-----------+---------+
|Intangible non-current assets |173 |- |990 |1,163 |
+--------------------------------+---------+---------+-----------+---------+
|Tangible non-current assets |9 |11 |- |20 |
+--------------------------------+---------+---------+-----------+---------+
|Total non-current assets |182 |11 |990 |1,182 |
+--------------------------------+---------+---------+-----------+---------+
| | | | | |
+--------------------------------+---------+---------+-----------+---------+
|Current assets | | | | |
+--------------------------------+---------+---------+-----------+---------+
|Current receivables |38 |46 |- |84 |
+--------------------------------+---------+---------+-----------+---------+
|Current tax assets |0 |- |- |0 |
+--------------------------------+---------+---------+-----------+---------+
|Prepaid expenses and accrued |17 |3 |- |20 |
|income | | | | |
+--------------------------------+---------+---------+-----------+---------+
|Cash and cash equivalents |51 |18 |- |69 |
+--------------------------------+-------...

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