CVENT HOLDING CORP. Item 8.01 Other Events. Supplemental Disclosures As previously disclosed, onMarch 14, 2023 ,Cvent Holding Corp. , aDelaware corporation ("Cvent" or the "Company"), entered into an Agreement and Plan of Merger (the "Merger Agreement") withCapstone Borrower, Inc. , aDelaware corporation ("Parent"), andCapstone Merger Sub, Inc. , aDelaware corporation and a wholly owned subsidiary of Parent ("Merger Sub"), pursuant to which Merger Sub will be merged with and into the Company, with the Company surviving as a wholly owned subsidiary of Parent (the "Merger"). OnMay 3, 2023 , the Company filed a definitive proxy statement on Schedule DEFM14A (the "Definitive Proxy Statement"), as such may be supplemented from time to time, with theU.S. Securities and Exchange Commission (the "SEC") with respect to the special meeting of the Company's stockholders scheduled to be held onJune 1, 2023 (the "Cvent Special Meeting"). Explanatory Note In connection with the Merger Agreement, three complaints have been filed as individual actions in theUnited States District Court for the Southern District of New York and are captioned O'Dell v.Cvent Holding Corp. et al., Case No. 23-cv-03688 (filedMay 2, 2023 ), Wang v.Cvent Holding Corp. et al., Case No. 23-cv-03799 (filedMay 5, 2023 ), and Scott v.Cvent Holding Corp. et al., Case No. 23-cv-04063 (filedMay 16, 2023 ). One complaint has been filed as an individual action in theSupreme Court of the State of New York , County ofWestchester and is captioned Herzog vs.Cvent Holding Corp. et al., Case No. 61007-2023 (filedMay 10, 2023 ). One complaint has been filed as an individual action in theUnited States District Court for the District of Delaware and is captioned Ballard vs.Cvent Holding Corp. et al., Case No. 23-cv-00525-UNA (filedMay 16, 2023 ). The foregoing complaints are referred to as the "Merger Actions". The Merger Actions generally allege that the preliminary proxy statement filed by the Company with theSEC onApril 21, 2023 or the Definitive Proxy Statement misrepresents and/or omits certain purportedly material information relating to the Company's financial projections and the analyses performed by the financial advisors to the Board of Directors ofCvent and the Special Committee of the Board of Directors ofCvent in connection with the Merger. The Merger Actions assert violations of Section 14(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), Rule 14a-9 promulgated thereunder, 15 U.S.C. §§ 78n(a), 78t(a) and/or Virginia Securities Act, §13.1-502, and/or negligent misrepresentation and concealment underNew York common law against all defendants (the Company and its Board of Directors), and/or violations of Section 20(a) of the Exchange Act againstCvent's directors. The Merger Actions seek, among other things, an injunction enjoining the stockholder vote on the Merger and the consummation of the Merger unless and until certain additional information is disclosed toCvent stockholders, costs of the action, including plaintiffs' attorneys' fees and experts' fees, and other relief the court may deem just and proper. The Company cannot predict the outcome of the Merger Actions. The Company believes that the Merger Actions are without merit, andCvent and the individual defendants intend to vigorously defend against the Merger Actions and any subsequently filed similar actions. If additional similar complaints are filed, absent new or significantly different allegations, the Company will not necessarily disclose such additional filings. -------------------------------------------------------------------------------- While the Company believes that the disclosures set forth in the Definitive Proxy Statement comply fully with all applicable law and denies the allegations in the pending Merger Actions described above, in order to moot plaintiffs' disclosure claims, avoid possible expense and nuisance and business delays, and provide additional information to its stockholders, the Company has determined voluntarily to supplement certain disclosures in the Definitive Proxy Statement related to plaintiffs' claims with the supplemental disclosures set forth below (the "Supplemental Disclosures"). Nothing in the Supplemental Disclosures shall be deemed an admission of the legal merit, necessity or materiality under applicable laws of any of the disclosures set forth herein. To the contrary, the Company specifically denies all allegations in the Merger Actions described above that any additional disclosure was or is required or material. All page references used herein refer to pages in the Definitive Proxy Statement before any additions or deletions resulting from the Supplemental Disclosures, and capitalized terms used below, unless otherwise defined, have the meanings set forth in the Definitive Proxy Statement. Bolded text shows text being added to a referenced disclosure in the Definitive Proxy Statement and stricken-through text shows text being deleted from a referenced disclosure in the Definitive Proxy Statement. This Current Report on Form 8-K is incorporated into, and amends and/or supplements, the Definitive Proxy Statement as provided herein. Except as specifically noted herein, the information set forth in the Definitive Proxy Statement remains unchanged.
Supplemental Disclosures to Definitive Proxy Statement
The following bolded language is added to page 32 of the proxy statement in the section titled ''The Merger - Background of the Merger.''
OnJuly 8, 2022 ,Mr. Aggarwal met telephonically with a representative of theBlackstone business unit invested in the Company to discuss the Company's business and the industry in which the Company operates but did not discuss a potential transaction or any specific terms thereof.
The following bolded language is added to page 33 of the proxy statement in the section titled ''The Merger - Background of the Merger.''
OnSeptember 19, 2022 , a representative of Party A, a financial sponsor with whichMr. Aggarwal had a long-standing relationship and which was familiar with the Company, calledMr. Aggarwal and requested the opportunity to set up a meeting with members of the Company's management team to discuss the Company's business.Mr. Aggarwal responded that the Company was focused on executing on its plan for the remainder of the year and that the Company's management team would not be prepared to hold such a meeting until a later date.Mr. Aggarwal noted that it might make sense to connect again near the end of the year.
The following bolded language is added to page 35 of the proxy statement in the section titled ''The Merger - Background of the Merger.''
The Board also reviewedQatalyst Partners' relationship disclosure letter and determined that, based on the contents of the letter, including, as applicable, any investment banking or advisory services provided to the Company,Vista Equity Partners Management, LLC ("Vista Equity Partners Management") orBlackstone and the amount of any compensation received byQatalyst Partners in connection with any such services, it believed thatQatalyst Partners did not have any conflicts that would affect the ability ofQatalyst Partners to fulfill its responsibilities as financial advisor to the Board.
The following bolded language is added to page 37 of the proxy statement in the section titled ''The Merger - Background of the Merger.''
Also onDecember 7, 2022 , representatives ofBlackstone , a representative ofQatalyst Partners and the Company's management met in person at a dinner to discussBlackstone's continued interest in acquiring the Company and to introduce members of the Company's management to representatives ofBlackstone . No terms of a potential -------------------------------------------------------------------------------- transaction (including terms regarding rollover or other investment from any of the Company's stockholders, or the employment or service ofMr. Aggarwal or any other person with, or compensation to be paid by,Blackstone or any of its affiliates) were discussed.
The following bolded language is added to page 38 of the proxy statement in the section titled ''The Merger - Background of the Merger.''
OnJanuary 6, 2023 , the Company's management circulated to the Board the January Projections (as defined below in the section of this proxy statement titled "The Merger - Certain Financial Projections"), which expanded the December Projections to include financial forecasts, including an estimate of free cash flows, through calendar year 2028, and the Supplemental Free Cash Flow Projections (as defined below in the section of this proxy statement titled "The Merger - Certain Financial Projections"), which included a free cash flow projection for each quarter of fiscal year 2023. The January Projections were approved by theBoard for use byQatalyst Partners for purposes of providing financial analyses in connection with the Board's evaluation of any potential strategic transaction and the Supplemental Free Cash Flow Projections were approved by the Board and subsequently shared withBlackstone (but no other potential bidders) in response to a diligence request fromBlackstone for such information. No other potential bidders requested the Supplemental Free Cash Flow Projections. For additional information with respect to the January Projections and the Supplemental Free Cash Flow Projections, see the section of this proxy statement titled "The Merger - Certain Financial Projections."
The following bolded language is added to page 40 of the proxy statement in the section titled ''The Merger - Background of the Merger.''
Following the publication of the WSJ Article, onJanuary 31, 2023 andFebruary 1, 2023 ,Mr. Aggarwal received inbound communications from representatives of two different venture capital and equity investment firms (which we refer to herein as "Party I" and "Party J"). The email from Party I requested a brief introductory call withMr. Aggarwal to establish a relationship but did not indicate that Party I was interested in pursuing, or capable of completing, a potential acquisition of the Company.Mr. Aggarwal and the representative of Party I did not have an introductory call and the representative of Party I did not contactMr. Aggarwal or the Company again following such initial outreach. The representative of Party J referenced the WSJ Article toMr. Aggarwal and noted that, while Party J did not have the financial capacity to acquire the Company, Party J would potentially be interested in participating as an additional equity financing source in an acquisition of the Company by a third party. Promptly thereafter,Mr. Aggarwal noted the inbound communications from Party I and Party J, neither of which were believed to be credible bidders with sufficient financial capacity to consummate a potential transaction with the Company, to the Chairman of the Board.
The following bolded language is added to page 42 of the proxy statement in the section titled ''The Merger - Background of the Merger.''
At the meeting, the Board also discussed the fact that theFebruary 23 Proposal was contingent on the Vista Stockholders "rolling" a portion of the shares of Company common stock owned by them into common equity of the post-closing company.Mr. Saroya reiterated that Vista's preference was to sell all of its shares of Company common stock for cash. However, he noted that if a rollover by Vista of a portion of its shares of Company common stock could be leveraged to obtain a higher price for the benefit of all of the Company's stockholders, Vista was willing to entertain a discussion of a partial rollover.Mr. Saroya noted that, at this point in time, Vista's interest was aligned with the Company's other stockholders, which was to maximize value for all stockholders. Representatives ofKirkland discussed with the Board its fiduciary duties and process implications and procedural safeguards that could be taken by the Board, as well as the potential benefits of creating a special committee if the Board determined to proceed with a proposal that involved a potential rollover by Vista. After discussion, the Board determined, with Vista's support, to submit a counteroffer at$9.00 per share, with Vista agreeing to reinvest$1.0 billion of its shares into a non-convertible preferred equity instrument with market terms to be separately negotiated between Vista andBlackstone . The Board determined that ifBlackstone accepted the Company's offer, it would establish a special committee of independent directors to evaluate the terms of any potential transaction in light of a reinvestment by Vista or the Vista Stockholders. After the meeting, representatives ofQatalyst Partners conveyed the Board-directed message to representatives ofBlackstone . The Board also reviewedQatalyst Partners' updated relationship disclosure letter and determined that, based on the letter, it continued to believe thatQatalyst Partners did not have any conflicts that would affect the ability ofQatalyst Partners to fulfill its responsibilities as financial advisor to the Board.
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The following bolded language is added to page 43 of the proxy statement in the section titled ''The Merger - Background of the Merger.''
The Board also reviewedQatalyst Partners' updated relationship disclosure letter and determined that, based on the contents of the letter, including, as applicable, any investment banking or advisory services provided to the Company,Vista Equity Partners Management orBlackstone and the amount of any compensation received byQatalyst Partners in connection with any such services, it continued to believe thatQatalyst Partners did not have any conflicts that would affect the ability ofQatalyst Partners to fulfill its responsibilities as financial advisor to the Board.
The following bolded language is added to page 47 of the proxy statement in the section titled ''The Merger - Background of the Merger.''
The Board also reviewedQatalyst Partners' updated relationship disclosure letter and determined that based on the contents of the letter, including, as applicable, any investment banking or advisory services provided to the Company,Vista Equity Partners Management ,Blackstone or ADIA and the amount of any compensation received byQatalyst Partners in connection with any such services, it continued to believe thatQatalyst Partners did not have any conflicts that would affect the ability ofQatalyst Partners to fulfill its responsibilities as financial advisor to the Board.
The following bolded language is added to page 47 of the proxy statement in the section titled ''The Merger - Background of the Merger.''
Also onMarch 9, 2023 , J.P. Morgan provided the Special Committee with customary relationship disclosures regarding J.P. Morgan's relationships withBlackstone and Vista. The Special Committee reviewed and discussed these relationship disclosures and determined that they were comfortable proceeding with J.P. Morgan.
The following bolded language is added to page 48 of the proxy statement in the section titled ''The Merger - Background of the Merger.''
The Special Committee then adopted resolutions favorably recommending the potential transaction withBlackstone and the Vista Preferred Financing to the Company Board after consideration of the factors described in the section titled "The Merger - Reasons for the Merger; Recommendation of the Special Committee and the Cvent Board." The Special Committee has not been disbanded.
The following bolded language is added to, and the following strikethrough
language is removed from, page 62 of the proxy statement in the section titled
''The Merger - Opinion of
During the two-year period prior to the date ofQatalyst Partners' opinion, no material relationship existed betweenQatalyst Partners or any of its affiliates, on the one hand, and the Company,Vista Equity Partners Management, LLC ("Vista Equity Partners Management"), Parent, ADIA orBlackstone , an affiliate of Parent, on the other hand, pursuant to which compensation was received byQatalyst Partners or its affiliates, except for a fee of approximately$62 million received byQatalyst Partners in connection with acting as a financial advisor toDatto Holding Corp. , a portfolio company ofVista Equity Partners Management , in connection with its announced transaction involvingKaseya Holdings Inc. andKaseya Inc. Qatalyst Partners and/or its affiliates may have provided, and may in the future provide, investment banking and other financial services to the Company,Vista Equity Partners Management , Parent, ADIA orBlackstone , or their respective affiliates, in each case, for whichQatalyst Partners may have received, or would expect to receive, compensation.
The following bolded language is added to page 65 of the proxy statement in the section titled ''The Merger - Opinion of J.P. Morgan - Public Trading Multiples.''
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Based on the results of this analysis and J.P. Morgan's professional judgment and experience, J.P. Morgan selected a FV/2023E Revenue Multiple reference range for the Company of 3.3x to 5.8x and a FV/2024E Revenue Multiple reference range for the Company of 2.9x to 4.9x.
The following bolded language is added to page 66 of the proxy statement in the section titled ''The Merger - Opinion of J.P. Morgan - Discounted Cash Flow Analysis.''
J.P. Morgan then discounted such unlevered free cash flow estimates and the range of terminal values to present value as ofDecember 31, 2022 using discount rates ranging from 11.0% to 12.0%, which range was chosen by J.P. Morgan based upon an analysis of the weighted average cost of capital of the Company, derived using the capital asset pricing model and J.P. Morgan's professional judgment and experience. The present values of such unlevered free cash flow estimates and the range of terminal values were then adjusted for the Company's estimated net debt of$106 million obtained from the Company management, calculated as ofDecember 31, 2022 to derive implied equity values per share of the Company common stock on a fully diluted basis.
The following bolded language is added to, and the following strikethrough language is removed from, page 67 of the proxy statement in the section titled ''The Merger - Opinion of J.P. Morgan - Miscellaneous."
During the two years preceding the date of J.P. Morgan's written opinion, J.P. Morgan and its affiliates have also had commercial or investment banking relationships withBlackstone portfolio companies ofBlackstone and ADIA, for which J.P. Morgan and such affiliates have received customary compensation. Such services during such period have included providing debt syndication, equity underwriting, debt underwriting and financial advisory services toBlackstone portfolio companies ofBlackstone and ADIA. In addition, J.P. Morgan's commercial banking affiliate is an agent bank and a lender under outstanding credit facilities of Vista and its portfolio companies and,Blackstone and its portfolio companies and ADIA portfolio companies, for which it receives customary compensation or other financial benefits. During the two-year period preceding delivery of its written opinion ending onMarch 14, 2023 , the aggregate fees recognized by J.P. Morgan from the Company were approximately$37 million , from Vista were approximately$30.4 million , and fromBlackstone were approximately$239.6 million , and from ADIA were approximately$161.3 million , as provided by J.P. Morgan. During the two years preceding the date of J.P. Morgan's written opinion, neither J.P. Morgan nor its affiliates have had any other material financial advisory or other material commercial or investment banking relationships with ADIA. In addition, J.P. Morgan and its affiliates hold, on a proprietary basis, less than 1% of the outstanding common stock of each of the Company andBlackstone . In the ordinary course of their businesses, J.P. Morgan and its affiliates may actively trade the debt and equity securities or financial instruments (including derivatives, bank loans or other obligations) of the Company orBlackstone for their own accounts or for the accounts of customers and, accordingly, they may at any time hold long or short positions in such securities or other financial instruments.
The following bolded rows are added to page 70 of the proxy statement in the section titled ''The Merger - Certain Financial Projections.''
The following table is a summary of the January Projections:
($ in millions) 2023E 2024E 2025E 2026E 2027E 2028E Revenue$ 728 $ 886 $ 1,065 $ 1,256 $ 1,470 $ 1,710 Adjusted EBITDA(1)$ 147 $ 228 $ 327 $ 418 $ 522 $ 640 Less: Capitalized Software Development Costs ($ 57 ) ($ 61 ) ($ 64 ) ($ 66 ) ($ 70 ) ($ 74 ) Less: Purchases of Property and Equipment ($ 10 ) ($ 11 ) ($ 12 ) ($ 13 ) ($ 15 ) ($ 16 ) Less: Cash Non-GAAP Items ($ 2 ) ($ 2 ) ($ 2 ) ($ 2 ) ($ 2 ) ($ 2 ) Less: Taxes Paid ($ 8 ) ($ 60 ) ($ 103 ) ($ 120 ) ($ 144 ) ($ 181 )
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Plus: Change in
$ 55 $ 64 Unlevered Free Cash Flow(2)$ 96 $ 126 $ 186 $ 263 $ 345 $ 431
The following table is a summary of the February Projections:
($ in millions) 2023E 2024E 2025E 2026E 2027E 2028E Revenue$ 728 $ 886 $ 1,065 $ 1,256 $ 1,470 $ 1,710 Adjusted EBITDA(1)$ 147 $ 228 $ 327 $ 418 $ 522 $ 640 Less: Capitalized Software Development Costs ($ 57 ) ($ 61 ) ($ 64 ) ($ 66 ) ($ 70 ) ($ 74 ) Less: Purchases of Property and Equipment ($ 10 ) ($ 11 ) ($ 12 ) ($ 13 ) ($ 15 ) ($ 16 ) Less: Cash Non-GAAP Items ($ 2 ) ($ 2 ) ($ 2 ) ($ 2 ) ($ 2 ) ($ 2 ) Less: Taxes Paid ($ 19 ) ($ 32 ) ($ 75 ) ($ 89 ) ($ 107 ) ($ 137 ) Plus: Change in Net Working Capital$ 27 $ 33 $ 40 $ 47 $ 55 $ 64 Unlevered Free Cash Flow(3)$ 86 $ 155 $
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The following bolded language is added to page 72 of the proxy statement in the section titled ''The Merger - Financing of the Merger.''
We presently anticipate that the total funds needed to complete the Merger and the related transactions will be approximately$4,589,000,000 , which will be funded via the Debt Financing, the Equity Financing and the Preferred Equity Financing described below. Parent and Merger Sub have represented toCvent in the Merger Agreement that, assuming the consummation of the Preferred Equity Financing, the aggregate proceeds from the Financing are sufficient to pay a portion of the aggregate Merger Consideration and related fees and expenses of the Company, Parent and Merger Sub (including in connection with the Merger and the Financing). A wholly owned subsidiary of ADIA will be a significant minority investor as part of the Merger. The following bolded language is added to page 75 of the proxy statement in the section titled ''The Merger - Interests of the Company's Directors and Executive Officers in the Merger.'' All Unvested RSU awards held by our non-employee directors will fully vest at the Effective Time, subject to the non-employee director's continued service through the Effective Time. The estimated aggregate amount that would be payable toCvent's seven non-employee directors for their Unvested RSU awards if the Effective Time occurred onMay 1, 2023 is$567,290 , of which$283,645 would be payable to each ofJim Frankola andMarcela Martin and$0 would be payable to the other five non-employee directors. As of the date of this proxy statement, none of our named executive officers are expected to receive any accelerated vesting or payment in respect of their Options or RSU awards as a result of the consummation of the Merger or in connection with any termination of employment following the consummation of the Merger. The following bolded language is added to page 75 of the proxy statement in the section titled ''The Merger - Interests of the Company's Directors and Executive Officers in the Merger.'' As of the date of this proxy statement, none of our executive officers has had any discussions or negotiations, or entered into any agreement, with Parent or any of its affiliates regarding the potential terms of their individual employment arrangements or the right to purchase or participate in the equity of Parent or one or more of its affiliates following the consummation of the Merger. Although the Company currently expects thatMr. Aggarwal will continue in his role as Chief Executive Officer of the Company, he has not had any negotiations, or entered into any agreement, with Parent or any of its affiliates regarding the potential terms of his individual employment -------------------------------------------------------------------------------- arrangements or the right to purchase or participate in the equity of Parent or one or more of its affiliates following the consummation of the Merger. Prior to or following the closing of the Merger, however, certain executive officers (includingMr. Aggarwal ) may have discussions, or may enter into agreements with, Parent,Cvent , or their respective affiliates regarding employment with, or the right to purchase or participate in the equity of, Parent or one or more of its affiliates. The following bolded language is added to page 75 of the proxy statement in the section titled ''The Merger - Interests of the Company's Directors and Executive Officers in the Merger.'' Under the Merger Agreement,Cvent may take certain actions before the Effective Time to mitigate the amount of potential "excess parachute payments" for "disqualified individuals" (each as defined in Section 280G of theU.S. Internal Revenue Code of 1986, as amended (the "Code")), including the executive officers, ifCvent determines such actions are necessary or appropriate to mitigate the impact of Section 4999 of the Code on its employees. As of the date of this proxy statement, no determination has been made as to whether any such actions would be necessary or appropriate, andCvent has not approved any specific actions to mitigate any impact of Section 280G of the Code onCvent or any disqualified individuals.
Additional Information and Where to Find It
This Current Report on Form 8-K is being made in respect of the pending Merger involving the Company and Parent and may be deemed to be soliciting material relating to such transaction. In connection with the transaction,Cvent filed the Definitive Proxy Statement relating to the Cvent Special Meeting with theSEC onMay 3, 2023 . Additionally,Cvent may file other relevant materials in connection with the transaction with theSEC . INVESTORS ARE URGED TO CAREFULLY READ THE DEFINITIVE PROXY STATEMENT REGARDING THE PENDING MERGER AND ANY OTHER RELEVANT DOCUMENTS IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PENDING MERGER. The Company's stockholders may obtain free copies of the documents the Company files with theSEC from theSEC's website at www.sec.gov or through the Investors portion of the Company's website at investors.cvent.com under the link "Financials" and then under the link "SEC Filings" or by contacting the Company's Investor Relations by e-mail at CventIR@icrinc.com.
Participants in the Solicitation
The Company and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the Company's stockholders in connection with the pending Merger. Information regarding the Company's directors and executive officers, including a description of their direct interests, by security holdings or otherwise, is contained in the Definitive Proxy Statement and the Company's other filings with theSEC made subsequent to the date of the Definitive Proxy Statement. To the extent holdings of the Company's securities by such directors or officers have changed since the amounts printed in the Definitive Proxy Statement, such changes have been or will be reflected on Initial Statements of Beneficial Ownership on Form 3 or Statements of Changes in Beneficial Ownership on Form 4 filed with theSEC . Additional information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, is set . . .
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