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Transaction includes $150 million of fully committed common stock PIPE anchored by Fidelity Investments, T. Rowe Price and other premier SaaS investors, in addition to $175 million forward purchase agreement from Dragoneer funds and Michael Bloomberg's family office, Willett Advisors
$968 million of expected net proceeds from transaction will be used to invest in CCC's growth initiatives and for general corporate purposes
Advent International will remain the majority shareholder and be closely aligned with Dragoneer and public shareholders at transaction close
Company expected to be listed on the NYSE upon completion of the combination in the second quarter of 2021
Investor webcast to discuss proposed transaction today, Wednesday, February 3, 2021 at 10:00AM EST
CCC Information Services Inc. ("CCC"), a leading SaaS platform for the property and casualty ("P&C") insurance economy, and Dragoneer Growth Opportunities Corp. (NYSE:DGNR) ("Dragoneer"), a special purpose acquisition company ("SPAC") formed by an affiliate of Dragoneer Investment Group, today announced a definitive merger agreement has been entered into between Dragoneer and CCC's parent holding company. Upon closing of the transaction, the combined company is expected to be renamed CCC Intelligent Solutions Holdings Inc. (the "Company") and is expected to be listed on the New York Stock Exchange.
CCC's mission-critical SaaS platform provides advanced AI, IoT, customer experience, and network management workflow solutions to the P&C insurance economy. CCC enables more than $100 billion of transactions annually among a vast ecosystem of interconnected businesses. CCC's network includes thousands of customers including insurers, repair facilities, automotive manufacturers, parts suppliers, and other industry participants who leverage CCC's platform to digitize operations, improve business performance, and power better decisions in an increasingly complex and rapidly changing market. Under Chairman and CEO Githesh Ramamurthy, who will continue to lead the Company following the close of the transaction, CCC expects to report approximately $600 million of revenue in 2020 and has delivered a consistent track record of profitable revenue growth for 20+ years by focusing on delivering best-in-class innovations for its customers.
"Today is an exciting day for CCC as our return to the public markets provides us with additional sources of capital to accelerate innovation and increase the value we provide customers," said Ramamurthy. "Throughout our history, CCC has developed pioneering technology solutions focused on enabling growth, increasing efficiency, and empowering new possibilities for all participants in the P&C insurance economy. We serve a large and interconnected market that is still in the early stages of digitizing its operations and is growing in complexity. We believe CCC is well positioned to support customer digitization in this dynamic market."
Ramamurthy continued, "We are incredibly excited to begin this new partnership with Dragoneer, one of the most highly respected investors in the world, and to continue our relationship with Advent, who have been terrific partners for the past four years. Together, I am confident CCC will continue to generate meaningful value for our customers and shareholders."
"Under Advent's ownership, CCC has cemented itself as a leading SaaS platform for the P&C insurance ecosystem," said Eric Wei, Managing Director at Advent. "Since 2017, we've partnered with Githesh and the CCC management team to accelerate organic growth through a focus on innovation, and we believe this sustained investment in R&D will deliver significant ROI for customers for decades to come. Advent is excited to partner with Dragoneer, with its preeminent technology investing franchise, to support CCC's continued focus on digitally transforming the insurance economy. We have strong conviction in CCC's growth potential and are not selling a single share as part of the transaction."
"CCC is one of those rare software companies that serves as the backbone of a critical industry – the P&C insurance economy," said Marc Stad, Founder and Portfolio Manager at Dragoneer. "As the products we use and the cars we drive become more and more sophisticated, insurers, consumers, manufacturers and service providers require increasing amounts of support and coordination whenever issues occur. CCC's advanced technology platform enables the right groups to connect quickly and efficiently, and its twenty-plus years of profitable growth are a testament to the value the company provides to its customers. The CCC team's impressive track record of execution and financial performance speaks for itself, and we are thrilled to partner with them and Advent as they work to realize their ambitious vision for the business."
Transaction Overview
The Company is expected to receive net proceeds of approximately $968 million at the closing of the transaction (assuming no redemptions are effected) and will continue to operate under the CCC management team. All cash proceeds from the transaction will be put towards the Company's balance sheet, with no existing CCC shareholders selling any shares in connection with the business combination. The boards of directors of both Dragoneer and CCC have approved the proposed transaction. Completion of the transaction, which is expected to occur in the second quarter of 2021, is subject to approval of Dragoneer's shareholders and the satisfaction or waiver of certain other customary closing conditions.
In addition to the approximately $690 million held in Dragoneer's trust account (assuming no redemptions are effected) and the $175 million forward purchase agreement commitment from Dragoneer funds and Michael Bloomberg's family office, a group of premier SaaS investors has committed to participate in the transaction through a common stock private investment in public equity ("PIPE") of approximately $150 million at $10 per share. The PIPE is anchored by Fidelity Investments and T. Rowe Price Group, Inc., with participation from Altimeter Capital Management L.P., Coatue, D1 Capital Partners L.P., Franklin Templeton, Janus Henderson Investors, Maverick Capital, MFS Investment Management, Sunley House Capital (an affiliate of Advent International) and other investors. Proceeds of the business combination and PIPE will be used for general corporate purposes and to fuel additional innovation and growth.
Current CCC shareholders and holders of equity awards are converting 100% of their equity interests into shares or equivalent awards of the Company at a total enterprise value for the Company of approximately $7 billion, reflecting a deep alignment of interests. Current shareholders of Dragoneer are converting their ordinary shares and warrants of Dragoneer into common stock and warrants of the Company on a one for one basis. Additionally, the current CCC shareholders and Dragoneer's sponsor each have an earnout tied to the trading price of the Company shares after the closing of the business combination, providing a significant incentive for post-closing value creation. Assuming no redemptions are effected, the current shareholders of CCC are expected to own approximately 83.2% of the Company after closing, with Advent remaining the largest shareholder in the Company.
Advisors
Citigroup Global Markets Inc. is acting as lead capital markets advisor to Dragoneer, in conjunction with capital markets advisors Goldman Sachs & Co., LLC and JP Morgan Securities LLC. Ropes & Gray LLP is acting as legal counsel to Dragoneer.
Evercore Group L.L.C. is acting as financial advisor and capital markets advisor to CCC. Kirkland & Ellis LLP is acting as legal counsel to CCC and Advent.
Citigroup Global Markets Inc. is acting as lead placement agent and Evercore Group L.L.C. as placement agent on the PIPE.
Citigroup Global Markets Inc., Goldman Sachs & Co., LLC, and J.P. Morgan Securities LLC acted as book-running managers on Dragoneer's $690 million initial public offering.
Posted In: DGNR
