Clarivate (CLVT) investor relations material

Deal Rationale and Strategic Fit

• Divestiture of the Life Sciences & Healthcare segment for $600 million to Altaris sharpens focus on core segments, particularly Academia & Government and Intellectual Property, which generate most profit and free cash flow.

• The move aligns with a broader value creation plan, optimizing the business model and portfolio for improved execution and innovation.

• Portfolio will emphasize AI-powered transformative intelligence in academia, government, and intellectual property.

• Supports long-term value creation and positions the company to deliver AI-powered solutions for the knowledge and innovation economy.

Financial Terms and Transaction Overview

• Sale valued at $600 million: $525 million in cash and a $75 million seller note, with $500 million in cash at closing and $25 million deferred.

• Transaction valued at just over 10x segment-adjusted EBITDA less capital spending, a 40% premium over the company’s overall metric.

• Proceeds will be used to retire 2028 and 2029 notes, reducing debt and leverage.

• LS&H segment will be classified as discontinued operations starting in Q3 until closing.

• Transaction expected to close by year-end, subject to customary regulatory approvals and closing conditions.

Financial Implications and Outlook

• Recurring organic revenue mix expected to improve by up to 900 basis points, profit margin by up to 300 basis points, and capital spending to decrease by $60 million.

• Free cash flow margin projected to expand by more than 300 basis points, with annual interest savings of $25 million from debt repayment.

• Reaffirmed full-year 2026 guidance: revenues (including discontinued operations) of $2.30B–$2.42B; revenues (excluding discontinued operations) of $1.94B–$2.04B; Adjusted EBITDA of $980M–$1.04B; Adjusted EBITDA margin of 42.0%–43.5%; Adjusted diluted EPS of $0.70–$0.80; free cash flow of $365M–$435M.

• Anticipates a non-cash goodwill impairment of $225M–$250M on the LS&H segment, not impacting financial metrics.

• FY 2026 guidance reaffirmed, with margin expansion and EPS growth driven by share repurchases.