Marcus, Priya —
I am pleased to confirm that the acquisition of Cloudium Technologies plc (Nasdaq: CLDM) by Solara Digital Infrastructure Fund VI LP ("Fund VI") has been completed. The Certificate of Merger was filed with the Delaware Secretary of State with an effective time of 11:59 PM ET this evening, July 9, 2024. Stratos Merger Sub Inc. has merged with and into Cloudium Technologies plc in a reverse triangular merger under the DGCL, with Cloudium surviving as a wholly owned subsidiary of Fund VI. The aggregate deal value is approximately $6.8 billion, reflecting cash merger consideration of approximately $36.92 per share (subject to rollover elections as described below).
Set forth below is a summary of the key closing mechanics, deliverables, and immediate next steps.
FINANCING — DEBT DRAW AND EQUITY FUNDING
• Term Loan B: $3,740,000,000 successfully drawn under the Credit Agreement with Meridian Atlantic Bank, N.A. (as Administrative Agent) and Ironclad Capital Markets LLC (as Co-Arranger). The facility carries a 7-year maturity (July 9, 2031) at SOFR + 325 bps.
• Revolving Credit Facility: $500,000,000 in committed capacity has been established with a 5-year maturity (July 9, 2029) at SOFR + 275 bps. No amounts were drawn at closing.
• Equity Contribution: Fund VI funded $2,832,888,096 in cash equity at closing.
• Rollover Equity: Jonathan Hargrove rolled over approximately $142,814,544, representing 50% of his 7,736,400 shares. Pinnacle Growth Ventures LLC rolled over approximately $473,241,408, representing 60% of its 21,367,200 shares. Total rollover equity is approximately $616,055,952.
EXISTING INDEBTEDNESS — PAYOFF
Cloudium's existing indebtedness of $820,000,000 under its credit agreement dated March 15, 2021 — comprising a $620,000,000 term loan and $200,000,000 drawn on its revolving facility — has been repaid in full to Atlas Commercial Lending Corp. in accordance with the payoff letter dated July 5, 2024. UCC-3 termination statements have been filed and lien releases delivered by Atlas.
ESCROW FUNDING
$544,000,000 (8% of aggregate deal value) has been deposited with Cobalt Trust Company as escrow agent in accordance with the Escrow Agreement. Wire confirmation was received from Laura Ng at Cobalt Trust Company. The escrow release schedule is as follows:
• 50% ($272,000,000) to be released 12 months post-closing (July 9, 2025), net of any pending indemnification claims. • Remaining balance to be released at 18 months (January 9, 2026), net of any pending claims.
Douglas Pemberton has been confirmed as Stockholder Representative.
MERGER CONSIDERATION
Cash merger consideration has been wired to Cascade Corporate Services Inc., acting as transfer agent and exchange agent, for distribution to non-rolling Cloudium stockholders. Letters of Transmittal will be mailed to former stockholders beginning July 10, 2024.
CLOSING DELIVERABLES
All key closing deliverables have been exchanged and confirmed, including the following:
• Officer's certificates from Cloudium (bring-down of representations and covenants) and from Buyer/Merger Sub. • Secretary's certificates from Cloudium, Stratos Merger Sub Inc., and Fund VI. • FIRPTA certificate confirming Cloudium is not a United States real property holding corporation. • Solvency certificate delivered by the CFO of the surviving entity. • Calderwood & Harkness closing legal opinions delivered to (i) Meridian Atlantic Bank, N.A. (Credit Agreement enforceability), (ii) Cobalt Trust Company (Escrow Agreement enforceability), and (iii) Cloudium (Delaware law due authorization and enforceability of Buyer/Merger Sub obligations). • Guarantee and Collateral Agreement and Intercreditor Agreement executed. • Good standing certificates for Stratos Merger Sub Inc. and Fund VI from the Delaware Secretary of State (each dated July 3, 2024). • R&W insurance no-claims declaration signed and delivered to Northfield Assurance Ltd. (Policy No. NFA-TRI-2024-00487). • Change-of-control consents from Aegis Federal Solutions Inc. and Helix Data Systems GmbH, previously obtained and confirmed.
REGULATORY CLEARANCES
All regulatory conditions were satisfied prior to closing:
• HSR Act: The initial 30-day waiting period expired March 11, 2024, with no Second Request issued. • UK CMA: Phase 1 unconditional clearance was granted April 3, 2024 (Case No. ME/7184/24). • CFIUS, EU Merger Regulation, German FDI, and India CCI filings were each previously assessed and determined not applicable.
Cloudium stockholder approval was obtained at the May 20, 2024 special meeting, with 82.4% of shares voted in favor of the merger.
NASDAQ DELISTING AND SEC MATTERS
Cloudium common stock (ticker: CLDM) will be delisted from Nasdaq. A Form 25 filing will be submitted on July 10, 2024. The Form 8-K closing announcement has been coordinated with Catherine Answorth at Ridgeway Phelps & Sato LLP for filing by Cloudium. A Form 15 to suspend SEC reporting obligations will follow in due course.
IMMEDIATE POST-CLOSING STEPS
I refer the team to the post-closing obligations tracker and integration memorandum previously circulated. Key near-term items include:
• Working-Capital True-Up: The final closing statement is to be delivered in accordance with Section 2.7 of the Merger Agreement.
• Indemnification: A claim procedures memo has been circulated separately to the deal team. As a reminder, the indemnification framework provides for a $51,000,000 tipping basket, a cap of $1,020,000,000 (15% of deal value), a de minimis threshold of $500,000 per claim, and an 18-month survival period expiring January 9, 2026.
• Escrow: Release calendar and instructions have been delivered to Cobalt Trust Company.
• Form D: A Form D filing for the rollover equity securities is due within 15 days of closing.
• Beneficial Ownership and Section 16 Filings: Schedule 13D and Forms 3/4 to be filed for Fund VI and new officers and directors of the surviving company.
• Post-Closing Corporate Restructuring: Re-domestication of Cloudium plc to Cloudium Inc., subsidiary reorganization, and IP migration considerations are being coordinated by Leonard Cross and the tax team with Richard Okamura at Glenmore Thornton LLP.
• R&W Insurance Retention Drop-Down: 50% of the retention ($544,000,000 to $272,000,000) drops after 12 months (July 9, 2025) if no claims are pending. Tiffany will calendar and track.
* * *
Congratulations to you, Marcus and Priya, and to the broader Solara team on the successful completion of this transaction. From engagement opening on August 14, 2023, through tonight's closing, this has been a nearly 11-month effort, and the result reflects the quality of judgment and discipline your team brought to every phase.
I want to acknowledge the outstanding work of the full Calderwood & Harkness team — Tiffany Rosenthal, Andrew Fitzpatrick, Leonard Cross, Elaine Forsythe, and Beatrice Holloway — as well as our productive coordination with Fiona McAllister and her colleagues at Albright & Kerr LLP on the UK regulatory workstream. Credit is also due to Damien Harlow and the team at Osprey Bancroft & Co. and the broader advisor group for seamless execution throughout.
We are happy to schedule a post-closing debrief call at your convenience. In the meantime, the Calderwood & Harkness team remains fully available for all post-closing matters.
With best regards,
Harrison Wexford Partner, Mergers & Acquisitions Calderwood & Harkness LLP 599 Lexington Avenue New York, NY 10022 T: (212) 455-7800 E: hwexford@calderwoodharkness.com Matter No. 1041-00003
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