form-8k-signing-announcement-draft.docx

1041-00003 · Solara Digital Infrastructure LP · SEC/Proxy

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PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT DRAFT — PREPARED BY CALDERWOOD & HARKNESS LLP FOR REVIEW BY RIDGEWAY PHELPS & SATO LLP Matter No. 1041-00003

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 22, 2024

CLOUDIUM TECHNOLOGIES PLC

(Exact name of registrant as specified in its charter)

Company Number (England and Wales): 09734521

US Headquarters: 600 Townsend Street, Suite 800, San Francisco, CA 94103

Registrant's telephone number, including area code: +44 (0) 20 7946 0123 / +1 (415) 555-0198

Not Applicable (Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Item 1.01 Entry into a Material Definitive Agreement.

The Merger Agreement

On January 22, 2024, Cloudium Technologies plc ("Cloudium" or the "Company"), a public limited company incorporated under the laws of England and Wales, entered into an Agreement and Plan of Merger (the "Merger Agreement") with Solara Digital Infrastructure Fund VI LP ("Parent"), a Delaware limited partnership, and Stratos Merger Sub Inc. ("Merger Sub"), a Delaware corporation and a wholly owned subsidiary of Parent. Parent is an investment fund managed by Solara Digital Infrastructure LP ("Solara"), a Delaware-based private equity firm focused on digital infrastructure and enterprise software assets. Merger Sub was formed solely for the purpose of effecting the transactions contemplated by the Merger Agreement.

The Merger. Pursuant to the Merger Agreement, and subject to the satisfaction or waiver of certain conditions set forth therein, Merger Sub will merge with and into the Company (the "Merger"), with the Company surviving the Merger as a wholly owned subsidiary of Parent. The Merger will be effected as a reverse triangular merger under the Delaware General Corporation Law (the "DGCL"). Following the consummation of the Merger, the common stock of Cloudium will be delisted from the Nasdaq Global Select Market and deregistered under the Securities Exchange Act of 1934, as amended (the "Exchange Act").

Merger Consideration. At the effective time of the Merger (the "Effective Time"), each share of common stock, par value $0.01 per share, of Cloudium issued and outstanding immediately prior to the Effective Time (other than Excluded Shares, Dissenting Shares, and Rollover Shares (each as defined in the Merger Agreement)) will be converted automatically into the right to receive $36.92 per share in cash, without interest and subject to any applicable withholding taxes (the "Per Share Merger Consideration"). The aggregate transaction value is approximately $6,800,000,000 (the "Aggregate Deal Value").

For purposes of the Merger Agreement, "Excluded Shares" means shares of common stock of Cloudium that are owned by Parent, Merger Sub, or any of their respective subsidiaries immediately prior to the Effective Time, and any shares of common stock of Cloudium held in treasury by the Company immediately prior to the Effective Time. Excluded Shares will be cancelled and retired at the Effective Time and no consideration will be paid or payable with respect thereto. As of the date of the Merger Agreement, the total number of shares of common stock of Cloudium issued and outstanding was 184,200,000.

Rollover Equity. Pursuant to separate Rollover Agreements entered into concurrently with the execution of the Merger Agreement, the following holders of common stock of Cloudium (collectively, the "Rollover Participants") have agreed to contribute a portion of their shares of Cloudium common stock to the surviving entity (or a parent entity thereof) in exchange for equity interests in such entity, in lieu of receiving the Per Share Merger Consideration with respect to such shares:

(a) Jonathan Hargrove, the Company's Chief Executive Officer, who holds approximately 4.2% of the outstanding shares of Cloudium common stock (7,736,400 shares), has agreed to roll over 50% of his shares (3,868,200 shares), representing a value of approximately $142,814,544 at the Per Share Merger Consideration. The remaining 50% of Mr. Hargrove's shares (3,868,200 shares) will be converted into the right to receive the Per Share Merger Consideration.

(b) Pinnacle Growth Ventures LLC ("Pinnacle"), which holds approximately 11.6% of the outstanding shares of Cloudium common stock (21,367,200 shares), has agreed to roll over 60% of its shares (12,820,320 shares), representing a value of approximately $473,241,408 at the Per Share Merger Consideration. The remaining 40% of Pinnacle's shares (8,546,880 shares) will be converted into the right to receive the Per Share Merger Consideration.

The total rollover equity to be contributed by the Rollover Participants is approximately $616,055,952 in the aggregate. The shares subject to the Rollover Agreements are referred to in the Merger Agreement as "Rollover Shares."

Treatment of Equity Awards

At the Effective Time, each option to purchase shares of Cloudium common stock (each, a "Company Option") that is outstanding and unexercised immediately prior to the Effective Time, whether vested or unvested, will be cancelled and converted into the right to receive a cash payment equal to the product of (i) the total number of shares of Cloudium common stock subject to such Company Option and (ii) the excess, if any, of the Per Share Merger Consideration over the per share exercise price of such Company Option, less applicable withholding taxes. Any Company Option with a per share exercise price equal to or in excess of the Per Share Merger Consideration will be cancelled at the Effective Time without any consideration payable in respect thereof.

At the Effective Time, each restricted stock unit award (each, a "Company RSU") that is outstanding and unvested immediately prior to the Effective Time will become fully vested and will be cancelled and converted into the right to receive a cash payment equal to the product of (i) the total number of shares of Cloudium common stock subject to such Company RSU and (ii) the Per Share Merger Consideration, less applicable withholding taxes.

At the Effective Time, each performance stock unit award (each, a "Company PSU") that is outstanding immediately prior to the Effective Time will be deemed to have achieved the applicable performance metrics at the target level of performance (or, if greater, the actual level of performance as determined through the most recently completed measurement period), and such Company PSU will become fully vested and will be cancelled and converted into the right to receive a cash payment equal to the product of (i) the total number of shares of Cloudium common stock subject to such Company PSU (as determined in accordance with the foregoing) and (ii) the Per Share Merger Consideration, less applicable withholding taxes.

Representations and Warranties

The Merger Agreement contains customary representations and warranties made by Cloudium relating to, among other things: corporate organization and qualification; capitalization; authority relative to the Merger Agreement; required consents and approvals; no conflicts; financial statements and SEC filings; absence of certain changes or events since September 30, 2023; absence of a material adverse effect; compliance with laws and permits; material contracts; real property; intellectual property; privacy and data security; tax matters; employee benefits and labor matters; environmental matters; insurance; litigation and proceedings; anti-bribery and anti-corruption compliance; related party transactions; brokers and finders; and the opinion of the Company's financial advisor.

The Merger Agreement also contains customary representations and warranties made by Parent and Merger Sub relating to, among other things: organization and qualification; authority relative to the Merger Agreement; required consents and approvals; no conflicts; financing; guarantee; solvency; ownership of Company shares; absence of certain agreements or understandings; brokers and finders; litigation; and acknowledgment of the Company's disclaimer of certain other representations and warranties.

The definition of "Material Adverse Effect" as used in the Merger Agreement with respect to the Company includes customary carve-outs for, among other things: changes in general economic conditions; changes in financial, credit, or securities markets; changes in applicable law or generally accepted accounting principles; changes generally affecting the industries in which the Company operates; pandemics, epidemics, or public health emergencies (including COVID-19 and any mutations or variants thereof); acts of war, armed hostilities, terrorism, or sabotage; earthquakes, hurricanes, or other natural disasters; the announcement or pendency of the Merger; any failure by the Company to meet internal or published projections (provided that the underlying causes of such failure may be taken into account); and changes resulting from actions taken at the written request or with the written consent of Parent or Merger Sub, in each case except to the extent such matters have a disproportionate adverse effect on the Company relative to other companies of similar size operating in the same industries and geographic markets.

The representations, warranties, and covenants of each party set forth in the Merger Agreement have been made solely for the benefit of the other parties to the Merger Agreement and were negotiated for the purpose of allocating contractual risk among the parties rather than establishing matters as facts. The representations and warranties may be subject to important qualifications, limitations, and exceptions agreed to by the parties, including being qualified by confidential disclosures made by each party for the purposes of allocating contractual risk between the parties instead of establishing such matters as facts. In addition, the representations and warranties may be subject to a contractual standard of materiality or material adverse effect different from that generally applicable to stockholders. Accordingly, investors and stockholders should not rely on the representations, warranties, and covenants, or any descriptions thereof, as characterizations of the actual state of facts or conditions of the Company, Parent, Merger Sub, or any of their respective affiliates or businesses.

Pre-Closing Covenants. The Merger Agreement provides that, during the period from the date of the Merger Agreement until the earlier of the Effective Time and the valid termination of the Merger Agreement (the "Interim Period"), the Company will, and will cause each of its subsidiaries to, use commercially reasonable efforts to conduct its business in the ordinary course of business consistent with past practice in all material respects and to preserve intact its current business organization, keep available the services of its current officers and key employees, and preserve its relationships with customers, suppliers, licensors, licensees, distributors, and others having material business dealings with the Company or any of its subsidiaries.

In addition, the Company has agreed to customary interim operating covenants that restrict the Company and its subsidiaries from taking certain actions without the prior written consent of Parent (not to be unreasonably withheld, conditioned, or delayed), including, among other things: amending the Company's organizational documents; issuing, selling, or encumbering shares or equity-linked securities; declaring or paying dividends or making distributions; repurchasing or redeeming securities; incurring, assuming, or guaranteeing indebtedness in excess of specified thresholds; making acquisitions or dispositions of assets in excess of specified thresholds; entering into, amending, or terminating material contracts outside the ordinary course; making capital expenditures in excess of amounts set forth in the Company's approved budget; making changes in accounting methods or policies; settling or compromising material litigation; and taking certain actions with respect to employee benefits and compensation.

No-Shop Provision. The Merger Agreement includes a customary "no-shop" provision that, effective as of the date of the Merger Agreement (January 22, 2024), restricts the Company, its subsidiaries, and their respective directors, officers, employees, and other representatives from, directly or indirectly: (i) soliciting, initiating, or knowingly encouraging or knowingly facilitating any proposal or offer that constitutes or could reasonably be expected to lead to an alternative acquisition proposal (as defined in the Merger Agreement); (ii) entering into, continuing, or otherwise participating in any discussions or negotiations regarding any alternative acquisition proposal; (iii) providing any non-public information to any third party in connection with or for the purpose of encouraging or facilitating an alternative acquisition proposal; or (iv) entering into any letter of intent, acquisition agreement, merger agreement, or similar agreement with respect to any alternative acquisition proposal.

Notwithstanding the foregoing restrictions, the no-shop provision is subject to a customary "fiduciary out" exception that permits the Company's board of directors (the "Board"), in certain circumstances and at any time prior to receipt of stockholder approval of the Merger, to: (a) engage in discussions and negotiations with, and furnish non-public information to, a third party that has made a bona fide, unsolicited written alternative acquisition proposal that the Board determines in good faith, after consultation with outside legal counsel and the Company's financial advisor, constitutes or could reasonably be expected to lead to a "Superior Proposal" (as defined in the Merger Agreement); and (b) effect an "Adverse Recommendation Change" (as defined in the Merger Agreement) in response to a Superior Proposal or a material "Intervening Event" (as defined in the Merger Agreement), in each case subject to compliance with specified notice and other procedural requirements set forth in the Merger Agreement (including providing Parent with at least four (4) business days' prior notice and the opportunity to negotiate revisions to the terms of the Merger Agreement). Any termination of the Merger Agreement by the Company in connection with the acceptance of a Superior Proposal is subject to concurrent payment of the Termination Fee (as defined below).

Conditions to Closing

The obligations of the Company, Parent, and Merger Sub to consummate the Merger are subject to the satisfaction or waiver of certain customary closing conditions, including:

(a) Stockholder Approval. The approval of the Merger and the adoption of the Merger Agreement by the holders of a majority of the outstanding shares of Cloudium common stock entitled to vote thereon at a duly convened meeting of stockholders of the Company.

(b) HSR Clearance. The expiration or early termination of the applicable waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and the rules and regulations promulgated thereunder.

(c) UK CMA Clearance. Receipt of clearance from the United Kingdom Competition and Markets Authority (the "CMA") with respect to the transactions contemplated by the Merger Agreement, on terms reasonably acceptable to Parent.

(d) No Legal Impediment. The absence of any law, statute, rule, regulation, executive order, decree, ruling, injunction, or other order (whether temporary, preliminary, or permanent) enacted, issued, promulgated, enforced, or entered by any governmental authority of competent jurisdiction that is then in effect and has the effect of making the Merger illegal or otherwise prohibiting consummation of the Merger.

(e) Accuracy of Representations and Warranties. The accuracy of the representations and warranties of the other party (or parties, as applicable) contained in the Merger Agreement, subject to specified materiality qualifiers, including the Material Adverse Effect standard, as of the date of the Merger Agreement and as of the closing date (as though made on and as of such date, except for representations and warranties that relate to a specific date, which need only be accurate as of such date).

(f) Compliance with Covenants. The performance and compliance in all material respects by the other party (or parties, as applicable) with all covenants and obligations required to be performed or complied with under the Merger Agreement at or prior to the closing.

(g) No Material Adverse Effect. With respect to the obligation of Parent and Merger Sub to consummate the Merger, no Material Adverse Effect having occurred with respect to the Company since the date of the Merger Agreement and being continuing as of the closing date.

The obligation of the Company to consummate the Merger is not subject to a financing condition.

Termination. The Merger Agreement may be terminated at any time prior to the Effective Time under certain circumstances, including:

(a) by mutual written consent of the Company and Parent;

(b) by either the Company or Parent if the Merger has not been consummated on or before June 30, 2024 (the "Outside Date"); provided, that the right to terminate pursuant to this provision will not be available to any party whose material breach of any representation, warranty, covenant, or agreement set forth in the Merger Agreement has been a principal cause of the failure of the Merger to be consummated by such date; provided, further, that the Outside Date may be extended by either party for up to two (2) additional periods of ninety (90) days each (to September 28, 2024 and December 27, 2024, respectively) if, as of the then-applicable Outside Date, all closing conditions other than the regulatory approval conditions have been satisfied or waived (or are capable of being satisfied at the closing);

(c) by either the Company or Parent if a governmental authority of competent jurisdiction has issued a final, non-appealable order, decree, ruling, or injunction permanently enjoining, restraining, or otherwise prohibiting the consummation of the Merger;

(d) by either the Company or Parent if stockholder approval of the Merger is not obtained at the stockholder meeting duly convened therefor (or any adjournment or postponement thereof) at which a vote on the Merger is taken;

(e) by Parent if the Board has effected an Adverse Recommendation Change;

(f) by the Company, at any time prior to receipt of stockholder approval, in order to accept a Superior Proposal and enter into a definitive agreement with respect thereto; provided, that (i) the Company has complied in all material respects with the no-shop provisions of the Merger Agreement, (ii) the Company has given Parent at least four (4) business days' prior written notice and the opportunity to negotiate revised terms, and (iii) concurrently with such termination, the Company pays Parent the Termination Fee;

(g) by Parent upon certain uncured material breaches by the Company of any of its representations, warranties, covenants, or agreements contained in the Merger Agreement, which breach would result in the failure of the applicable closing conditions to be satisfied; and

(h) by the Company upon certain uncured material breaches by Parent or Merger Sub of any of their respective representations, warranties, covenants, or agreements contained in the Merger Agreement, which breach would result in the failure of the applicable closing conditions to be satisfied, or upon the failure of Parent or Merger Sub to consummate the Merger within three (3) business days after the date on which the closing should have occurred pursuant to the terms of the Merger Agreement when all of the conditions to closing have been satisfied or waived (triggering the obligation to pay the Reverse Termination Fee (as defined below)).

Termination Fees. If the Merger Agreement is terminated under specified circumstances, including (i) by Parent following an Adverse Recommendation Change by the Board, (ii) by the Company in order to accept a Superior Proposal, or (iii) by either party following the failure to obtain stockholder approval or by Parent following certain breaches by the Company, in each case if, within twelve (12) months of such termination, the Company enters into an alternative acquisition agreement (and such alternative transaction is subsequently consummated), the Company will be required to pay to Parent a termination fee of $221,000,000 (the "Termination Fee"), representing approximately 3.25% of the Aggregate Deal Value. The Termination Fee is payable by wire transfer of immediately available funds and, in specified circumstances, will constitute the sole and exclusive remedy of Parent and Merger Sub against the Company and its affiliates with respect to the Merger Agreement and the transactions contemplated thereby.

If the Merger Agreement is terminated under specified circumstances relating to Parent's or Merger Sub's material breach of their respective representations, warranties, covenants, or agreements contained in the Merger Agreement, or the failure of Parent or Merger Sub to consummate the Merger when required to do so under the terms of the Merger Agreement (including as a result of a failure of the financing), Parent will be required to pay to the Company a reverse termination fee of $374,000,000 (the "Reverse Termination Fee"), representing approximately 5.5% of the Aggregate Deal Value. The Reverse Termination Fee is payable by wire transfer of immediately available funds and, in specified circumstances, will constitute the sole and exclusive remedy of the Company and its affiliates against Parent, Merger Sub, and their respective affiliates with respect to the Merger Agreement and the transactions contemplated thereby.

Indemnification. The Merger Agreement provides for post-closing indemnification by the former stockholders of Cloudium (acting through the Stockholder Representative (as defined below) and through the escrow mechanism described below) in favor of Parent and its affiliates (including the surviving company) for losses arising out of or resulting from breaches of the representations and warranties of the Company contained in the Merger Agreement, breaches of certain pre-closing covenants, and certain specified indemnifiable matters. The indemnification obligations of the former stockholders are subject to the following limitations and other terms:

(a) General Indemnification Cap. The aggregate liability of the former stockholders of Cloudium for breaches of the Company's general representations and warranties (other than Fundamental Representations and Special Indemnity Matters, each as defined in the Merger Agreement) will not exceed 15% of the Aggregate Deal Value, or $1,020,000,000.

(b) Tipping Basket. Parent and its affiliates will not be entitled to indemnification for breaches of the Company's general representations and warranties until the aggregate amount of all losses exceeds 0.75% of the Aggregate Deal Value, or $51,000,000 (the "Basket Amount"), at which point the former stockholders of Cloudium will be liable for all losses from the first dollar (i.e., a tipping basket, not a deductible). Individual claims below a de minimis threshold of $500,000 will not count toward the Basket Amount and will not be indemnifiable.

(c) Survival Period. The representations and warranties of the Company contained in the Merger Agreement will survive the closing of the Merger for a period of eighteen (18) months following the closing date (the "Survival Period"). Based on an anticipated closing date of approximately July 9, 2024, the Survival Period would expire on approximately January 9, 2026. The Fundamental Representations (including representations relating to organization, capitalization, authority, and brokers) will survive for a period of thirty-six (36) months following the closing date. Tax representations will survive until the expiration of the applicable statute of limitations (plus sixty (60) days).

(d) Special Indemnities. Certain indemnification obligations of the former stockholders of Cloudium are not subject to the General Indemnification Cap, the Basket Amount, or the Survival Period, including indemnification for losses arising from fraud, intentional misrepresentation, or willful breach of the Merger Agreement, certain specified tax indemnities, and certain specified pre-closing litigation matters identified on the disclosure schedules to the Merger Agreement (collectively, the "Special Indemnity Matters").

Escrow. At the closing of the Merger, $544,000,000, representing 8.0% of the Aggregate Deal Value (the "Escrow Amount"), will be withheld from the merger consideration otherwise payable to the former stockholders of Cloudium (on a pro rata basis) and deposited with Cobalt Trust Company, N.A. ("Cobalt"), as escrow agent, into a segregated escrow account pursuant to the terms of an Escrow Agreement to be entered into at closing among Parent, Cobalt, and the Stockholder Representative. The Escrow Amount will serve as the primary source of recovery for Parent's indemnification claims under the Merger Agreement. The Escrow Amount will be released as follows:

(a) First Release. Fifty percent (50%) of the Escrow Amount ($272,000,000) will be released to the former stockholders of Cloudium (through the Stockholder Representative for distribution) on the date that is twelve (12) months after the closing date, less the aggregate amount of any unresolved pending indemnification claims as of such date (which amounts will continue to be held in escrow pending resolution of such claims).

(b) Final Release. The remaining balance of the Escrow Amount (including any amounts retained in respect of previously pending claims that have been resolved in favor of the former stockholders) will be released to the former stockholders of Cloudium on the date that is eighteen (18) months after the closing date (i.e., the expiration of the Survival Period), less the aggregate amount of any unresolved pending indemnification claims as of such date (which amounts will continue to be held in escrow pending resolution of such claims).

Douglas Pemberton, the Company's independent Board Chair, has been appointed as the stockholder representative (the "Stockholder Representative") to act on behalf of the former stockholders of Cloudium with respect to all matters arising under the Merger Agreement and the Escrow Agreement following the closing, including the resolution of indemnification claims and the administration and distribution of the Escrow Amount.

Financing. The Merger will be funded through a combination of committed debt financing and equity contributions from Parent.

Debt Financing. Parent has obtained committed debt financing pursuant to a commitment letter (the "Debt Commitment Letter"), dated January 22, 2024, from Meridian Atlantic Bank, N.A. ("Meridian Atlantic"), as lead arranger, bookrunner, and administrative agent, and Ironclad Capital Markets LLC ("Ironclad"), as co-arranger and joint bookrunner, providing for the following credit facilities:

(a) a senior secured first-lien term loan B facility in an aggregate principal amount of $3,740,000,000 (the "Term Loan B Facility"), with a maturity of seven (7) years from the closing date and bearing interest at a rate per annum equal to the Secured Overnight Financing Rate ("SOFR") plus 325 basis points; and

(b) a senior secured first-lien revolving credit facility in an aggregate principal amount of $500,000,000 (the "Revolving Credit Facility"), with a maturity of five (5) years from the closing date and bearing interest at a rate per annum equal to SOFR plus 275 basis points.

The total committed debt financing under the Debt Commitment Letter is $4,240,000,000. The Debt Commitment Letter was executed concurrently with the Merger Agreement on January 22, 2024. The obligations of the lenders under the Debt Commitment Letter to fund the debt financing are subject to customary conditions, including the execution and delivery of definitive credit documentation, the accuracy of specified representations and warranties, the absence of a material adverse effect with respect to Cloudium, and the consummation of the Merger substantially concurrently with the funding.

Equity Financing. Parent has also received an equity commitment letter (the "Equity Commitment Letter"), dated January 22, 2024, from Solara Digital Infrastructure Fund VI LP, pursuant to which Solara Digital Infrastructure Fund VI LP has committed to contribute $2,832,888,096 in cash equity to Parent (or a subsidiary thereof) to fund a portion of the Merger consideration and related transaction costs.

Limited Guarantee. Solara Fund VI GP LLC, the general partner of Solara Digital Infrastructure Fund VI LP, has provided a limited guarantee (the "Limited Guarantee") in favor of the Company guaranteeing the payment of certain obligations of Parent under the Merger Agreement, including the Reverse Termination Fee and certain enforcement costs, in an aggregate amount not to exceed $246,000,000, consisting of the $221,000,000 Termination Fee amount plus up to $25,000,000 for enforcement costs and expenses.

The obligations of the Company to consummate the Merger are not subject to a financing condition.

Repayment of Existing Indebtedness

At the closing of the Merger, the Company's existing indebtedness under its Credit Agreement, dated as of March 15, 2021 (as amended, restated, supplemented, or otherwise modified from time to time, the "Existing Credit Agreement"), among the Company, certain subsidiaries of the Company as guarantors, Atlas Commercial Lending Corp., as administrative agent and collateral agent, and the lenders party thereto, will be repaid in full. The aggregate amount of the Company's outstanding indebtedness under the Existing Credit Agreement as of the date of the Merger Agreement is approximately $820,000,000, consisting of approximately $620,000,000 outstanding under the term loan facility and approximately $200,000,000 drawn under the revolving credit facility. The consummation of the Merger constitutes a "change of control" (as defined in the Existing Credit Agreement) and triggers mandatory prepayment of all outstanding indebtedness thereunder. At closing, Parent will cause the surviving company to use a portion of the proceeds from the Term Loan B Facility to satisfy such repayment obligations in full.

Sources and Uses

The following table sets forth the estimated sources and uses of funds in connection with the Merger:

Sources

Uses

Regulatory Approvals. The consummation of the Merger is conditioned upon the receipt of certain regulatory approvals. The parties intend to file a Pre-Merger Notification and Report Form under the HSR Act with the Federal Trade Commission (the "FTC") and the Antitrust Division of the United States Department of Justice (the "DOJ") as promptly as practicable following the date of the Merger Agreement. The initial waiting period under the HSR Act is thirty (30) days from the date of filing, subject to early termination or extension by issuance of a request for additional information (a "Second Request").

In addition, the parties intend to submit a Merger Notice Form to the UK Competition and Markets Authority in accordance with the Enterprise Act 2002. The CMA's Phase 1 review period is forty (40) working days from the date of notification. Based on the assessment of the parties and their respective legal advisors, a voluntary notice to the Committee on Foreign Investment in the United States ("CFIUS") is not expected to be submitted, as no national security nexus has been identified in connection with the transactions contemplated by the Merger Agreement. Furthermore, no merger filing with the European Commission is required, as the Company's revenues attributable to EU member states are below the applicable thresholds under Council Regulation (EC) No. 139/2004 (the "EU Merger Regulation").

Other Agreements Executed Concurrently

In connection with the execution of the Merger Agreement, the parties entered into the following additional agreements:

Voting and Support Agreements. Concurrently with the execution of the Merger Agreement, each of Jonathan Hargrove (holding approximately 4.2% of the outstanding shares of Cloudium common stock) and Pinnacle Growth Ventures LLC (holding approximately 11.6% of the outstanding shares of Cloudium common stock) entered into Voting and Support Agreements (the "Support Agreements") with Parent, pursuant to which each such stockholder agreed to, among other things: (i) vote all of its shares of Cloudium common stock in favor of the adoption of the Merger Agreement and the approval of the Merger; (ii) vote all of its shares against any alternative acquisition proposal or any other proposal, action, or agreement that would reasonably be expected to impede, interfere with, delay, postpone, discourage, or adversely affect the Merger; and (iii) refrain from transferring any of its shares of Cloudium common stock prior to the earlier of the Effective Time and the valid termination of the Merger Agreement, subject to customary exceptions. The shares subject to the Support Agreements represent, in the aggregate, approximately 15.8% of the outstanding shares of Cloudium common stock.

Rollover Agreements. The Rollover Agreements entered into with Mr. Hargrove and Pinnacle are described in "— Rollover Equity" above.

Non-Competition and Non-Solicitation Agreements. Concurrently with the execution of the Merger Agreement, each of Jonathan Hargrove, the Company's Chief Executive Officer, and Sienna Whitfield, the Company's Chief Financial Officer, entered into Non-Competition and Non-Solicitation Agreements (the "Non-Compete Agreements") with Parent, pursuant to which each such executive has agreed to customary non-competition and non-solicitation restrictions for a period of twenty-four (24) months following the closing of the Merger.

Escrow Agreement. The parties have agreed upon a form of Escrow Agreement (the "Escrow Agreement") among Parent, Cobalt Trust Company, N.A. (as escrow agent), and the Stockholder Representative, which will become effective at the closing of the Merger and which governs the terms and conditions of the escrow described in "— Escrow" above.

Stockholder Representative Agreement. The parties have entered into a Stockholder Representative Agreement appointing Douglas Pemberton as the Stockholder Representative to act on behalf of the former stockholders of Cloudium following the closing of the Merger, with authority to take all actions and make all decisions necessary or appropriate in connection with the Escrow Agreement, the indemnification provisions of the Merger Agreement, and any other post-closing matters on behalf of the former stockholders.

Representation and Warranty Insurance

In connection with the Merger, Parent has obtained a buyer-side representation and warranty insurance policy (Policy No. NFA-TRI-2024-00487) from Northfield Assurance Ltd. (the "R&W Policy"). The R&W Policy has a total aggregate policy limit of $680,000,000, representing approximately 10% of the Aggregate Deal Value. The R&W Policy provides excess coverage above the Escrow Amount ($544,000,000, which serves as the retention under the policy) for breaches of the representations and warranties of the Company contained in Article IV of the Merger Agreement, subject to certain customary exclusions and limitations set forth in the R&W Policy. The premium for the R&W Policy is $13,600,000, which was paid by Parent. The R&W Policy was bound on January 19, 2024, and will become effective upon the closing of the Merger.

Copy of the Merger Agreement

The foregoing description of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is filed as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference. Stockholders and other interested parties are urged to read the Merger Agreement in its entirety for a more complete description of the terms and conditions of the Merger.

The Merger Agreement has been included to provide investors and stockholders with information regarding the terms of the Merger. It is not intended to provide any other factual information about the Company, Parent, or Merger Sub or any of their respective subsidiaries or affiliates. The representations, warranties, and covenants contained in the Merger Agreement were made only for the purposes of the Merger Agreement as of the specific dates therein, were solely for the benefit of the parties to the Merger Agreement, may be subject to limitations agreed upon by the contracting parties (including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts), and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors and stockholders are not third-party beneficiaries under the Merger Agreement and should not rely on the representations, warranties, and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of any of the parties to the Merger Agreement or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company's public disclosures.

Item 2.01 Completion of Acquisition or Disposition of Assets.

Not applicable. The Merger has not yet been consummated. This Item 2.01 will be reported upon the closing of the Merger, if and when it occurs.

Item 5.01 Changes in Control of Registrant.

Not applicable at this time. The change of control of the Company will occur upon the consummation of the Merger, which is expected in mid-2024, subject to the satisfaction or waiver of the conditions described above under Item 1.01. The Company will file an amendment to this Current Report on Form 8-K or a separate Current Report on Form 8-K to report the change of control at the appropriate time.

Item 8.01 Other Events.

Press Release. On January 23, 2024, the Company issued a press release announcing the execution of the Merger Agreement. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Additional Information and Where to Find It

In connection with the proposed Merger, the Company intends to file a proxy statement on Schedule 14A (the "Proxy Statement") with the U.S. Securities and Exchange Commission (the "SEC"). The definitive Proxy Statement will be mailed to the stockholders of record of the Company entitled to vote at the special meeting of stockholders to be convened for the purpose of voting on the adoption of the Merger Agreement and the approval of the Merger. Blackthorn Proxy Advisors LLC has been retained by the Company as proxy solicitor in connection with the solicitation of proxies for such special meeting.

INVESTORS AND STOCKHOLDERS OF THE COMPANY ARE URGED TO READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER AND RELATED MATTERS.

Investors and stockholders will be able to obtain free copies of the Proxy Statement and other documents filed with the SEC by the Company through the website maintained by the SEC at www.sec.gov or through the Company's website at www.cloudiumtech.com under the "Investors" tab. In addition, investors and stockholders may obtain free copies of the documents filed with the SEC by the Company by directing a written request to: Cloudium Technologies plc, Attention: Investor Relations, 600 Townsend Street, Suite 800, San Francisco, CA 94103, or by calling +1 (415) 555-0198.

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 proposed Merger. Information about the Company's directors and executive officers and their ownership of the Company's common stock is set forth in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2023, filed with the SEC on December 14, 2023, and the Company's proxy statement on Schedule 14A for its 2023 annual meeting of stockholders, filed with the SEC on January 8, 2024. Additional information regarding the interests of participants in the solicitation of proxies in connection with the proposed Merger will be included in the Proxy Statement and other relevant materials when they are filed with the SEC. The Company's directors and executive officers who may be deemed to be participants in the solicitation include:

Directors: Douglas Pemberton (Board Chair, independent); Evelyn Carmichael (designee of Pinnacle Growth Ventures LLC); Rafael Montoya (designee of Pinnacle Growth Ventures LLC); Dr. Amara Osei (independent); William Stratton (independent); Mei-Lin Chen (independent); and Jonathan Hargrove (CEO).

Executive Officers: Jonathan Hargrove (Chief Executive Officer); Sienna Whitfield (Chief Financial Officer); Nadia Chowdhury (General Counsel and Secretary); Marcus Tan (Chief Technology Officer); and Laura Eichinger (Chief Revenue Officer).

Pinnacle Growth Ventures LLC (Evelyn Carmichael, Managing Member) holds approximately 11.6% of the outstanding shares of Cloudium common stock and holds two seats on the Board, as noted above.

Free copies of these documents may be obtained as described above.

Cautionary Statement Regarding Forward-Looking Statements

This Current Report on Form 8-K (including the press release furnished as Exhibit 99.1 hereto) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements include, but are not limited to, statements regarding: the proposed Merger, including the expected timing of the completion of the Merger; the ability to complete the Merger considering the various closing conditions, including the receipt of Cloudium stockholder approval and regulatory approvals under the HSR Act and from the UK CMA; the expected benefits and impact of the proposed Merger on the Company and its stockholders; the availability and terms of the debt financing; the ability of Parent to fund the equity commitment; the anticipated post-closing operations, strategy, and management of the surviving company; and any other statements that relate to non-historical facts. These forward-looking statements are based on the Company's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements.

Factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to: (i) the failure to obtain required stockholder approval for the Merger; (ii) the failure to obtain, or delays in obtaining, required regulatory approvals under the HSR Act, from the UK CMA, or from any other governmental authority, or the imposition of conditions or restrictions in connection with the receipt of such approvals that could be burdensome or materially adverse to the Company or to the combined business following completion of the Merger; (iii) the failure to satisfy other closing conditions to the Merger; (iv) risks related to the debt financing, including the possibility that the committed debt financing may not be funded on the terms described herein, or at all; (v) the occurrence of any event, change, or other circumstance that could give rise to a termination of the Merger Agreement or a Material Adverse Effect; (vi) the potential for competing acquisition proposals; (vii) the potential adverse effects on the Company's business, operating results, and financial condition, including the potential adverse effects on the Company's relationships with its customers, suppliers, employees, and other stakeholders, resulting from the announcement or pendency of the Merger; (viii) the risk of stockholder, regulatory, or other litigation in connection with the proposed Merger; (ix) the diversion of management's time and attention to the proposed Merger; (x) the amount of the costs, fees, expenses, and charges related to the Merger; and (xi) other risks and uncertainties described in the Company's filings with the SEC, including the "Risk Factors" sections of the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2023 and the Company's Quarterly Reports on Form 10-Q.

The forward-looking statements in this Current Report on Form 8-K speak only as of the date on which such statements are made. The Company undertakes no obligation to update or revise any forward-looking statements to reflect events or circumstances after the date of this Current Report on Form 8-K or to reflect new information, actual results, revised expectations, or the occurrence of unanticipated events, except as may be required under applicable securities laws.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

\* Certain schedules and exhibits to the Merger Agreement have been omitted in accordance with Item 601(a)(5) of Regulation S-K. The Company hereby agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon its request.

\\ Furnished, not filed.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CLOUDIUM TECHNOLOGIES PLC

By: ________

Name: Nadia Chowdhury

Title: General Counsel and Secretary

Date: January 23, 2024

EXHIBIT 99.1

PRESS RELEASE

FOR IMMEDIATE RELEASE January 23, 2024

Cloudium Technologies plc to Be Acquired by Solara Digital Infrastructure Fund VI LP for Approximately $6.8 Billion

Cloudium stockholders to receive $36.92 per share in cash

Transaction unanimously approved by the Cloudium Board of Directors

CEO Jonathan Hargrove and significant shareholder Pinnacle Growth Ventures LLC to roll over equity into the surviving entity

LONDON and SAN FRANCISCO — January 23, 2024 — Cloudium Technologies plc (Nasdaq: CLDM) ("Cloudium" or the "Company"), a leading provider of cloud-native enterprise resource planning (ERP), customer-relationship management (CRM), and business-intelligence software-as-a-service (SaaS) solutions, today announced that it has entered into a definitive Agreement and Plan of Merger (the "Merger Agreement") to be acquired by Solara Digital Infrastructure Fund VI LP ("Fund VI"), an investment fund managed by Solara Digital Infrastructure LP ("Solara"), a leading private equity firm focused on digital infrastructure and enterprise software assets. Under the terms of the Merger Agreement, Cloudium stockholders will receive $36.92 per share in cash, representing an aggregate equity value of approximately $6.8 billion.

The Per Share Merger Consideration of $36.92 per share represents a premium of approximately 32% over Cloudium's unaffected closing stock price of $27.97 per share on November 17, 2023, the last full trading day prior to published market speculation regarding a potential transaction involving the Company, and a premium of approximately 28% over the 30-day volume-weighted average price of $28.84 per share for the period ending on November 17, 2023.

The transaction values Cloudium at approximately 16.8 times the Company's last twelve months ("LTM") Adjusted EBITDA of $405,000,000 for the fiscal year ended September 30, 2023. The Company reported LTM revenue of $1,620,000,000 for the fiscal year ended September 30, 2023, and annual recurring revenue ("ARR") of $1,740,000,000 as of December 31, 2023.

Jonathan Hargrove, the Company's Chief Executive Officer, who holds approximately 4.2% of the outstanding shares, and Pinnacle Growth Ventures LLC ("Pinnacle"), a significant existing stockholder holding approximately 11.6% of the outstanding shares, have each agreed to roll over a portion of their equity holdings into the surviving entity, demonstrating their continued confidence in the long-term growth prospects of the business.

The Merger Agreement was unanimously approved by the Cloudium Board of Directors, following a comprehensive review process conducted with the assistance of independent financial and legal advisors.

Transaction Details

Under the terms of the Merger Agreement, a wholly owned subsidiary of Fund VI will merge with and into Cloudium, with Cloudium surviving the merger as a wholly owned subsidiary of Fund VI. Each outstanding share of Cloudium common stock (other than shares held by the rollover participants, shares held in treasury, and dissenting shares) will be converted into the right to receive $36.92 per share in cash, without interest.

The transaction is expected to be funded through a combination of equity contributed by Fund VI and committed debt financing provided by Meridian Atlantic Bank, N.A., as lead arranger, and Ironclad Capital Markets LLC, as co-arranger, consisting of a $3,740,000,000 Term Loan B facility and a $500,000,000 revolving credit facility.

Completion of the transaction is expected in mid-2024, subject to the approval of Cloudium's stockholders, the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, clearance by the United Kingdom Competition and Markets Authority, and the satisfaction of other customary closing conditions. The transaction is not subject to a financing condition.

Comments from the Cloudium Board and Management

Douglas Pemberton, the independent Board Chair of Cloudium, stated: "This transaction is the result of a thorough and deliberate review process undertaken by the Board, with the assistance of independent financial and legal advisors, to evaluate the best path forward for Cloudium and its stockholders. The Per Share Merger Consideration of $36.92 represents a compelling premium and delivers significant, immediate, and certain cash value to our stockholders. After careful consideration of the Company's standalone prospects, the current market environment, and the terms of the proposed transaction, the Board unanimously determined that this merger is in the best interests of Cloudium and its stockholders, and we recommend that stockholders vote in favor of the transaction."

Jonathan Hargrove, Chief Executive Officer of Cloudium, commented: "I am excited about the opportunity to partner with Solara to take Cloudium to the next level. Over the past decade, we have built Cloudium into a market-leading cloud-native platform, and Solara shares our vision for the enormous growth opportunity ahead of us. My decision to roll over a meaningful portion of my equity holdings into the combined entity reflects my deep conviction in Cloudium's future. With Solara's proven track record of investing in and scaling enterprise software businesses, and with their operational resources and capital to support continued innovation and expansion, I am confident that Cloudium will be well-positioned to accelerate product development, enter new markets, and deliver even greater value to our customers, employees, and partners."

Marcus Elliston, Founder and Managing Partner of Solara Digital Infrastructure LP, added: "We have long admired Cloudium's market-leading position in cloud-native ERP, CRM, and business intelligence solutions, and we are thrilled to have the opportunity to partner with Jonathan and the entire Cloudium team. Cloudium has built a differentiated, mission-critical platform that serves as the backbone of its customers' businesses, and we see tremendous opportunity to invest in Cloudium's technology, expand its product suite, and accelerate its international growth. With approximately $38 billion in assets under management and a proven track record across fourteen platform investments in our Fund IV, Fund V, and Fund VI vehicles, Solara is uniquely positioned to support Cloudium's next chapter of growth. We are committed to investing in Cloudium's people and platform and look forward to working closely with the management team to realize the Company's full potential."

Advisors

Veridian Partners LLC is serving as the exclusive financial advisor to Cloudium and delivered a fairness opinion to the Cloudium Board of Directors on January 21, 2024. Ridgeway Phelps & Sato LLP is serving as legal counsel to Cloudium. Blackthorn Proxy Advisors LLC has been retained as proxy solicitor.

Osprey Bancroft & Co. is serving as financial advisor to Solara. Calderwood & Harkness LLP is serving as legal counsel to Solara.

Meridian Atlantic Bank, N.A. and Ironclad Capital Markets LLC have provided committed debt financing for the transaction.

About Cloudium Technologies plc

Cloudium Technologies plc (Nasdaq: CLDM) is a leading provider of cloud-native enterprise resource planning (ERP), customer-relationship management (CRM), and business-intelligence software-as-a-service (SaaS) solutions. Cloudium's integrated platform enables mid-market and enterprise customers to streamline operations, enhance customer engagement, and make data-driven decisions. The Company employs approximately 6,800 people globally, with operations in the United States, United Kingdom, India, and Germany. Cloudium is headquartered at 45 Broadwick Street, London W1F 0DB, United Kingdom, with US headquarters at 600 Townsend Street, Suite 800, San Francisco, CA 94103. For more information, please visit www.cloudiumtech.com.

About Solara Digital Infrastructure LP

Solara Digital Infrastructure LP is a leading private equity firm focused on digital infrastructure and enterprise software investments. Founded by Marcus Elliston and co-led by Priya Narasimhan (Co-Managing Partner & Chief Investment Officer), Solara manages approximately $38 billion in assets under management across six flagship funds. The investing fund for this transaction is Solara Digital Infrastructure Fund VI LP (vintage 2022; $12.4 billion committed capital). Solara's portfolio includes fourteen current platform investments across Fund IV, Fund V, and Fund VI, spanning cloud computing, cybersecurity, data analytics, and enterprise SaaS. Solara is headquartered at 1200 Market Street, Suite 3400, Wilmington, DE 19801. For more information, please visit www.solaradigital.com.

Additional Information and Where to Find It

In connection with the proposed Merger, Cloudium intends to file a proxy statement on Schedule 14A (the "Proxy Statement") with the U.S. Securities and Exchange Commission (the "SEC"). The definitive Proxy Statement will be mailed to the stockholders of record of Cloudium entitled to vote at the special meeting of stockholders to be convened for the purpose of voting on the adoption of the Merger Agreement and the approval of the Merger.

INVESTORS AND STOCKHOLDERS OF CLOUDIUM ARE URGED TO READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER AND RELATED MATTERS.

Investors and stockholders will be able to obtain free copies of the Proxy Statement and other documents filed with the SEC by Cloudium through the website maintained by the SEC at www.sec.gov or through the Company's website at www.cloudiumtech.com under the "Investors" tab. In addition, investors and stockholders may obtain free copies of the documents filed with the SEC by Cloudium by directing a written request to: Cloudium Technologies plc, Attention: Investor Relations, 600 Townsend Street, Suite 800, San Francisco, CA 94103, or by calling +1 (415) 555-0198.

Participants in the Solicitation

Cloudium 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 proposed Merger. Information about the Company's directors and executive officers and their ownership of the Company's common stock is set forth in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2023, filed with the SEC on December 14, 2023, and the Company's proxy statement on Schedule 14A for its 2023 annual meeting of stockholders, filed with the SEC on January 8, 2024. Additional information regarding the interests of participants in the solicitation of proxies in connection with the proposed Merger will be included in the Proxy Statement and other relevant materials when they are filed with the SEC. Free copies of these documents may be obtained as described above.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements include, but are not limited to, statements regarding: the proposed Merger, including the expected timing of the completion of the Merger; the ability to complete the Merger considering the various closing conditions; the expected benefits and impact of the proposed Merger on the Company and its stockholders; the anticipated post-closing operations, strategy, and management of the surviving company; and any other statements that relate to non-historical facts. These forward-lookin

PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT DRAFT — PREPARED BY CALDERWOOD & HARKNESS LLP FOR REVIEW BY RIDGEWAY PHELPS & SATO LLP Matter No. 1041-00003
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 22, 2024
CLOUDIUM TECHNOLOGIES PLC
(Exact name of registrant as specified in its charter)
Company Number (England and Wales): 09734521
US Headquarters: 600 Townsend Street, Suite 800, San Francisco, CA 94103
Registrant's telephone number, including area code: +44 (0) 20 7946 0123 / +1 (415) 555-0198
Not Applicable (Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 1.01 Entry into a Material Definitive Agreement.
The Merger Agreement
On January 22, 2024, Cloudium Technologies plc ("Cloudium" or the "Company"), a public limited company incorporated under the laws of England and Wales, entered into an Agreement and Plan of Merger (the "Merger Agreement") with Solara Digital Infrastructure Fund VI LP ("Parent"), a Delaware limited partnership, and Stratos Merger Sub Inc. ("Merger Sub"), a Delaware corporation and a wholly owned subsidiary of Parent. Parent is an investment fund managed by Solara Digital Infrastructure LP ("Solara"), a Delaware-based private equity firm focused on digital infrastructure and enterprise software assets. Merger Sub was formed solely for the purpose of effecting the transactions contemplated by the Merger Agreement.
The Merger.  Pursuant to the Merger Agreement, and subject to the satisfaction or waiver of certain conditions set forth therein, Merger Sub will merge with and into the Company (the "Merger"), with the Company surviving the Merger as a wholly owned subsidiary of Parent. The Merger will be effected as a reverse triangular merger under the Delaware General Corporation Law (the "DGCL"). Following the consummation of the Merger, the common stock of Cloudium will be delisted from the Nasdaq Global Select Market and deregistered under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Merger Consideration.  At the effective time of the Merger (the "Effective Time"), each share of common stock, par value $0.01 per share, of Cloudium issued and outstanding immediately prior to the Effective Time (other than Excluded Shares, Dissenting Shares, and Rollover Shares (each as defined in the Merger Agreement)) will be converted automatically into the right to receive $36.92 per share in cash, without interest and subject to any applicable withholding taxes (the "Per Share Merger Consideration"). The aggregate transaction value is approximately $6,800,000,000 (the "Aggregate Deal Value").
For purposes of the Merger Agreement, "Excluded Shares" means shares of common stock of Cloudium that are owned by Parent, Merger Sub, or any of their respective subsidiaries immediately prior to the Effective Time, and any shares of common stock of Cloudium held in treasury by the Company immediately prior to the Effective Time. Excluded Shares will be cancelled and retired at the Effective Time and no consideration will be paid or payable with respect thereto. As of the date of the Merger Agreement, the total number of shares of common stock of Cloudium issued and outstanding was 184,200,000.
Rollover Equity.  Pursuant to separate Rollover Agreements entered into concurrently with the execution of the Merger Agreement, the following holders of common stock of Cloudium (collectively, the "Rollover Participants") have agreed to contribute a portion of their shares of Cloudium common stock to the surviving entity (or a parent entity thereof) in exchange for equity interests in such entity, in lieu of receiving the Per Share Merger Consideration with respect to such shares:
(a) Jonathan Hargrove, the Company's Chief Executive Officer, who holds approximately 4.2% of the outstanding shares of Cloudium common stock (7,736,400 shares), has agreed to roll over 50% of his shares (3,868,200 shares), representing a value of approximately $142,814,544 at the Per Share Merger Consideration. The remaining 50% of Mr. Hargrove's shares (3,868,200 shares) will be converted into the right to receive the Per Share Merger Consideration.
(b) Pinnacle Growth Ventures LLC ("Pinnacle"), which holds approximately 11.6% of the outstanding shares of Cloudium common stock (21,367,200 shares), has agreed to roll over 60% of its shares (12,820,320 shares), representing a value of approximately $473,241,408 at the Per Share Merger Consideration. The remaining 40% of Pinnacle's shares (8,546,880 shares) will be converted into the right to receive the Per Share Merger Consideration.
The total rollover equity to be contributed by the Rollover Participants is approximately $616,055,952 in the aggregate. The shares subject to the Rollover Agreements are referred to in the Merger Agreement as "Rollover Shares."
Treatment of Equity Awards
At the Effective Time, each option to purchase shares of Cloudium common stock (each, a "Company Option") that is outstanding and unexercised immediately prior to the Effective Time, whether vested or unvested, will be cancelled and converted into the right to receive a cash payment equal to the product of (i) the total number of shares of Cloudium common stock subject to such Company Option and (ii) the excess, if any, of the Per Share Merger Consideration over the per share exercise price of such Company Option, less applicable withholding taxes. Any Company Option with a per share exercise price equal to or in excess of the Per Share Merger Consideration will be cancelled at the Effective Time without any consideration payable in respect thereof.
At the Effective Time, each restricted stock unit award (each, a "Company RSU") that is outstanding and unvested immediately prior to the Effective Time will become fully vested and will be cancelled and converted into the right to receive a cash payment equal to the product of (i) the total number of shares of Cloudium common stock subject to such Company RSU and (ii) the Per Share Merger Consideration, less applicable withholding taxes.
At the Effective Time, each performance stock unit award (each, a "Company PSU") that is outstanding immediately prior to the Effective Time will be deemed to have achieved the applicable performance metrics at the target level of performance (or, if greater, the actual level of performance as determined through the most recently completed measurement period), and such Company PSU will become fully vested and will be cancelled and converted into the right to receive a cash payment equal to the product of (i) the total number of shares of Cloudium common stock subject to such Company PSU (as determined in accordance with the foregoing) and (ii) the Per Share Merger Consideration, less applicable withholding taxes.
Representations and Warranties
The Merger Agreement contains customary representations and warranties made by Cloudium relating to, among other things: corporate organization and qualification; capitalization; authority relative to the Merger Agreement; required consents and approvals; no conflicts; financial statements and SEC filings; absence of certain changes or events since September 30, 2023; absence of a material adverse effect; compliance with laws and permits; material contracts; real property; intellectual property; privacy and data security; tax matters; employee benefits and labor matters; environmental matters; insurance; litigation and proceedings; anti-bribery and anti-corruption compliance; related party transactions; brokers and finders; and the opinion of the Company's financial advisor.
The Merger Agreement also contains customary representations and warranties made by Parent and Merger Sub relating to, among other things: organization and qualification; authority relative to the Merger Agreement; required consents and approvals; no conflicts; financing; guarantee; solvency; ownership of Company shares; absence of certain agreements or understandings; brokers and finders; litigation; and acknowledgment of the Company's disclaimer of certain other representations and warranties.
The definition of "Material Adverse Effect" as used in the Merger Agreement with respect to the Company includes customary carve-outs for, among other things: changes in general economic conditions; changes in financial, credit, or securities markets; changes in applicable law or generally accepted accounting principles; changes generally affecting the industries in which the Company operates; pandemics, epidemics, or public health emergencies (including COVID-19 and any mutations or variants thereof); acts of war, armed hostilities, terrorism, or sabotage; earthquakes, hurricanes, or other natural disasters; the announcement or pendency of the Merger; any failure by the Company to meet internal or published projections (provided that the underlying causes of such failure may be taken into account); and changes resulting from actions taken at the written request or with the written consent of Parent or Merger Sub, in each case except to the extent such matters have a disproportionate adverse effect on the Company relative to other companies of similar size operating in the same industries and geographic markets.
The representations, warranties, and covenants of each party set forth in the Merger Agreement have been made solely for the benefit of the other parties to the Merger Agreement and were negotiated for the purpose of allocating contractual risk among the parties rather than establishing matters as facts. The representations and warranties may be subject to important qualifications, limitations, and exceptions agreed to by the parties, including being qualified by confidential disclosures made by each party for the purposes of allocating contractual risk between the parties instead of establishing such matters as facts. In addition, the representations and warranties may be subject to a contractual standard of materiality or material adverse effect different from that generally applicable to stockholders. Accordingly, investors and stockholders should not rely on the representations, warranties, and covenants, or any descriptions thereof, as characterizations of the actual state of facts or conditions of the Company, Parent, Merger Sub, or any of their respective affiliates or businesses.
Pre-Closing Covenants.  The Merger Agreement provides that, during the period from the date of the Merger Agreement until the earlier of the Effective Time and the valid termination of the Merger Agreement (the "Interim Period"), the Company will, and will cause each of its subsidiaries to, use commercially reasonable efforts to conduct its business in the ordinary course of business consistent with past practice in all material respects and to preserve intact its current business organization, keep available the services of its current officers and key employees, and preserve its relationships with customers, suppliers, licensors, licensees, distributors, and others having material business dealings with the Company or any of its subsidiaries.
In addition, the Company has agreed to customary interim operating covenants that restrict the Company and its subsidiaries from taking certain actions without the prior written consent of Parent (not to be unreasonably withheld, conditioned, or delayed), including, among other things: amending the Company's organizational documents; issuing, selling, or encumbering shares or equity-linked securities; declaring or paying dividends or making distributions; repurchasing or redeeming securities; incurring, assuming, or guaranteeing indebtedness in excess of specified thresholds; making acquisitions or dispositions of assets in excess of specified thresholds; entering into, amending, or terminating material contracts outside the ordinary course; making capital expenditures in excess of amounts set forth in the Company's approved budget; making changes in accounting methods or policies; settling or compromising material litigation; and taking certain actions with respect to employee benefits and compensation.
No-Shop Provision.  The Merger Agreement includes a customary "no-shop" provision that, effective as of the date of the Merger Agreement (January 22, 2024), restricts the Company, its subsidiaries, and their respective directors, officers, employees, and other representatives from, directly or indirectly: (i) soliciting, initiating, or knowingly encouraging or knowingly facilitating any proposal or offer that constitutes or could reasonably be expected to lead to an alternative acquisition proposal (as defined in the Merger Agreement); (ii) entering into, continuing, or otherwise participating in any discussions or negotiations regarding any alternative acquisition proposal; (iii) providing any non-public information to any third party in connection with or for the purpose of encouraging or facilitating an alternative acquisition proposal; or (iv) entering into any letter of intent, acquisition agreement, merger agreement, or similar agreement with respect to any alternative acquisition proposal.
Notwithstanding the foregoing restrictions, the no-shop provision is subject to a customary "fiduciary out" exception that permits the Company's board of directors (the "Board"), in certain circumstances and at any time prior to receipt of stockholder approval of the Merger, to: (a) engage in discussions and negotiations with, and furnish non-public information to, a third party that has made a bona fide, unsolicited written alternative acquisition proposal that the Board determines in good faith, after consultation with outside legal counsel and the Company's financial advisor, constitutes or could reasonably be expected to lead to a "Superior Proposal" (as defined in the Merger Agreement); and (b) effect an "Adverse Recommendation Change" (as defined in the Merger Agreement) in response to a Superior Proposal or a material "Intervening Event" (as defined in the Merger Agreement), in each case subject to compliance with specified notice and other procedural requirements set forth in the Merger Agreement (including providing Parent with at least four (4) business days' prior notice and the opportunity to negotiate revisions to the terms of the Merger Agreement). Any termination of the Merger Agreement by the Company in connection with the acceptance of a Superior Proposal is subject to concurrent payment of the Termination Fee (as defined below).
Conditions to Closing
The obligations of the Company, Parent, and Merger Sub to consummate the Merger are subject to the satisfaction or waiver of certain customary closing conditions, including:
(a) Stockholder Approval. The approval of the Merger and the adoption of the Merger Agreement by the holders of a majority of the outstanding shares of Cloudium common stock entitled to vote thereon at a duly convened meeting of stockholders of the Company.
(b) HSR Clearance. The expiration or early termination of the applicable waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and the rules and regulations promulgated thereunder.
(c) UK CMA Clearance. Receipt of clearance from the United Kingdom Competition and Markets Authority (the "CMA") with respect to the transactions contemplated by the Merger Agreement, on terms reasonably acceptable to Parent.
(d) No Legal Impediment. The absence of any law, statute, rule, regulation, executive order, decree, ruling, injunction, or other order (whether temporary, preliminary, or permanent) enacted, issued, promulgated, enforced, or entered by any governmental authority of competent jurisdiction that is then in effect and has the effect of making the Merger illegal or otherwise prohibiting consummation of the Merger.
(e) Accuracy of Representations and Warranties. The accuracy of the representations and warranties of the other party (or parties, as applicable) contained in the Merger Agreement, subject to specified materiality qualifiers, including the Material Adverse Effect standard, as of the date of the Merger Agreement and as of the closing date (as though made on and as of such date, except for representations and warranties that relate to a specific date, which need only be accurate as of such date).
(f) Compliance with Covenants. The performance and compliance in all material respects by the other party (or parties, as applicable) with all covenants and obligations required to be performed or complied with under the Merger Agreement at or prior to the closing.
(g) No Material Adverse Effect. With respect to the obligation of Parent and Merger Sub to consummate the Merger, no Material Adverse Effect having occurred with respect to the Company since the date of the Merger Agreement and being continuing as of the closing date.
The obligation of the Company to consummate the Merger is not subject to a financing condition.
Termination.  The Merger Agreement may be terminated at any time prior to the Effective Time under certain circumstances, including:
(a) by mutual written consent of the Company and Parent;
(b) by either the Company or Parent if the Merger has not been consummated on or before June 30, 2024 (the "Outside Date"); provided, that the right to terminate pursuant to this provision will not be available to any party whose material breach of any representation, warranty, covenant, or agreement set forth in the Merger Agreement has been a principal cause of the failure of the Merger to be consummated by such date; provided, further, that the Outside Date may be extended by either party for up to two (2) additional periods of ninety (90) days each (to September 28, 2024 and December 27, 2024, respectively) if, as of the then-applicable Outside Date, all closing conditions other than the regulatory approval conditions have been satisfied or waived (or are capable of being satisfied at the closing);
(c) by either the Company or Parent if a governmental authority of competent jurisdiction has issued a final, non-appealable order, decree, ruling, or injunction permanently enjoining, restraining, or otherwise prohibiting the consummation of the Merger;
(d) by either the Company or Parent if stockholder approval of the Merger is not obtained at the stockholder meeting duly convened therefor (or any adjournment or postponement thereof) at which a vote on the Merger is taken;
(e) by Parent if the Board has effected an Adverse Recommendation Change;
(f) by the Company, at any time prior to receipt of stockholder approval, in order to accept a Superior Proposal and enter into a definitive agreement with respect thereto; provided, that (i) the Company has complied in all material respects with the no-shop provisions of the Merger Agreement, (ii) the Company has given Parent at least four (4) business days' prior written notice and the opportunity to negotiate revised terms, and (iii) concurrently with such termination, the Company pays Parent the Termination Fee;
(g) by Parent upon certain uncured material breaches by the Company of any of its representations, warranties, covenants, or agreements contained in the Merger Agreement, which breach would result in the failure of the applicable closing conditions to be satisfied; and
(h) by the Company upon certain uncured material breaches by Parent or Merger Sub of any of their respective representations, warranties, covenants, or agreements contained in the Merger Agreement, which breach would result in the failure of the applicable closing conditions to be satisfied, or upon the failure of Parent or Merger Sub to consummate the Merger within three (3) business days after the date on which the closing should have occurred pursuant to the terms of the Merger Agreement when all of the conditions to closing have been satisfied or waived (triggering the obligation to pay the Reverse Termination Fee (as defined below)).
Termination Fees.  If the Merger Agreement is terminated under specified circumstances, including (i) by Parent following an Adverse Recommendation Change by the Board, (ii) by the Company in order to accept a Superior Proposal, or (iii) by either party following the failure to obtain stockholder approval or by Parent following certain breaches by the Company, in each case if, within twelve (12) months of such termination, the Company enters into an alternative acquisition agreement (and such alternative transaction is subsequently consummated), the Company will be required to pay to Parent a termination fee of $221,000,000 (the "Termination Fee"), representing approximately 3.25% of the Aggregate Deal Value. The Termination Fee is payable by wire transfer of immediately available funds and, in specified circumstances, will constitute the sole and exclusive remedy of Parent and Merger Sub against the Company and its affiliates with respect to the Merger Agreement and the transactions contemplated thereby.
If the Merger Agreement is terminated under specified circumstances relating to Parent's or Merger Sub's material breach of their respective representations, warranties, covenants, or agreements contained in the Merger Agreement, or the failure of Parent or Merger Sub to consummate the Merger when required to do so under the terms of the Merger Agreement (including as a result of a failure of the financing), Parent will be required to pay to the Company a reverse termination fee of $374,000,000 (the "Reverse Termination Fee"), representing approximately 5.5% of the Aggregate Deal Value. The Reverse Termination Fee is payable by wire transfer of immediately available funds and, in specified circumstances, will constitute the sole and exclusive remedy of the Company and its affiliates against Parent, Merger Sub, and their respective affiliates with respect to the Merger Agreement and the transactions contemplated thereby.
Indemnification.  The Merger Agreement provides for post-closing indemnification by the former stockholders of Cloudium (acting through the Stockholder Representative (as defined below) and through the escrow mechanism described below) in favor of Parent and its affiliates (including the surviving company) for losses arising out of or resulting from breaches of the representations and warranties of the Company contained in the Merger Agreement, breaches of certain pre-closing covenants, and certain specified indemnifiable matters. The indemnification obligations of the former stockholders are subject to the following limitations and other terms:
(a) General Indemnification Cap. The aggregate liability of the former stockholders of Cloudium for breaches of the Company's general representations and warranties (other than Fundamental Representations and Special Indemnity Matters, each as defined in the Merger Agreement) will not exceed 15% of the Aggregate Deal Value, or $1,020,000,000.
(b) Tipping Basket. Parent and its affiliates will not be entitled to indemnification for breaches of the Company's general representations and warranties until the aggregate amount of all losses exceeds 0.75% of the Aggregate Deal Value, or $51,000,000 (the "Basket Amount"), at which point the former stockholders of Cloudium will be liable for all losses from the first dollar (i.e., a tipping basket, not a deductible). Individual claims below a de minimis threshold of $500,000 will not count toward the Basket Amount and will not be indemnifiable.
(c) Survival Period. The representations and warranties of the Company contained in the Merger Agreement will survive the closing of the Merger for a period of eighteen (18) months following the closing date (the "Survival Period"). Based on an anticipated closing date of approximately July 9, 2024, the Survival Period would expire on approximately January 9, 2026. The Fundamental Representations (including representations relating to organization, capitalization, authority, and brokers) will survive for a period of thirty-six (36) months following the closing date. Tax representations will survive until the expiration of the applicable statute of limitations (plus sixty (60) days).
(d) Special Indemnities. Certain indemnification obligations of the former stockholders of Cloudium are not subject to the General Indemnification Cap, the Basket Amount, or the Survival Period, including indemnification for losses arising from fraud, intentional misrepresentation, or willful breach of the Merger Agreement, certain specified tax indemnities, and certain specified pre-closing litigation matters identified on the disclosure schedules to the Merger Agreement (collectively, the "Special Indemnity Matters").
Escrow.  At the closing of the Merger, $544,000,000, representing 8.0% of the Aggregate Deal Value (the "Escrow Amount"), will be withheld from the merger consideration otherwise payable to the former stockholders of Cloudium (on a pro rata basis) and deposited with Cobalt Trust Company, N.A. ("Cobalt"), as escrow agent, into a segregated escrow account pursuant to the terms of an Escrow Agreement to be entered into at closing among Parent, Cobalt, and the Stockholder Representative. The Escrow Amount will serve as the primary source of recovery for Parent's indemnification claims under the Merger Agreement. The Escrow Amount will be released as follows:
(a) First Release. Fifty percent (50%) of the Escrow Amount ($272,000,000) will be released to the former stockholders of Cloudium (through the Stockholder Representative for distribution) on the date that is twelve (12) months after the closing date, less the aggregate amount of any unresolved pending indemnification claims as of such date (which amounts will continue to be held in escrow pending resolution of such claims).
(b) Final Release. The remaining balance of the Escrow Amount (including any amounts retained in respect of previously pending claims that have been resolved in favor of the former stockholders) will be released to the former stockholders of Cloudium on the date that is eighteen (18) months after the closing date (i.e., the expiration of the Survival Period), less the aggregate amount of any unresolved pending indemnification claims as of such date (which amounts will continue to be held in escrow pending resolution of such claims).
Douglas Pemberton, the Company's independent Board Chair, has been appointed as the stockholder representative (the "Stockholder Representative") to act on behalf of the former stockholders of Cloudium with respect to all matters arising under the Merger Agreement and the Escrow Agreement following the closing, including the resolution of indemnification claims and the administration and distribution of the Escrow Amount.
Financing.  The Merger will be funded through a combination of committed debt financing and equity contributions from Parent.
Debt Financing. Parent has obtained committed debt financing pursuant to a commitment letter (the "Debt Commitment Letter"), dated January 22, 2024, from Meridian Atlantic Bank, N.A. ("Meridian Atlantic"), as lead arranger, bookrunner, and administrative agent, and Ironclad Capital Markets LLC ("Ironclad"), as co-arranger and joint bookrunner, providing for the following credit facilities:
(a) a senior secured first-lien term loan B facility in an aggregate principal amount of $3,740,000,000 (the "Term Loan B Facility"), with a maturity of seven (7) years from the closing date and bearing interest at a rate per annum equal to the Secured Overnight Financing Rate ("SOFR") plus 325 basis points; and
(b) a senior secured first-lien revolving credit facility in an aggregate principal amount of $500,000,000 (the "Revolving Credit Facility"), with a maturity of five (5) years from the closing date and bearing interest at a rate per annum equal to SOFR plus 275 basis points.
The total committed debt financing under the Debt Commitment Letter is $4,240,000,000. The Debt Commitment Letter was executed concurrently with the Merger Agreement on January 22, 2024. The obligations of the lenders under the Debt Commitment Letter to fund the debt financing are subject to customary conditions, including the execution and delivery of definitive credit documentation, the accuracy of specified representations and warranties, the absence of a material adverse effect with respect to Cloudium, and the consummation of the Merger substantially concurrently with the funding.
Equity Financing. Parent has also received an equity commitment letter (the "Equity Commitment Letter"), dated January 22, 2024, from Solara Digital Infrastructure Fund VI LP, pursuant to which Solara Digital Infrastructure Fund VI LP has committed to contribute $2,832,888,096 in cash equity to Parent (or a subsidiary thereof) to fund a portion of the Merger consideration and related transaction costs.
Limited Guarantee. Solara Fund VI GP LLC, the general partner of Solara Digital Infrastructure Fund VI LP, has provided a limited guarantee (the "Limited Guarantee") in favor of the Company guaranteeing the payment of certain obligations of Parent under the Merger Agreement, including the Reverse Termination Fee and certain enforcement costs, in an aggregate amount not to exceed $246,000,000, consisting of the $221,000,000 Termination Fee amount plus up to $25,000,000 for enforcement costs and expenses.
The obligations of the Company to consummate the Merger are not subject to a financing condition.
Repayment of Existing Indebtedness
At the closing of the Merger, the Company's existing indebtedness under its Credit Agreement, dated as of March 15, 2021 (as amended, restated, supplemented, or otherwise modified from time to time, the "Existing Credit Agreement"), among the Company, certain subsidiaries of the Company as guarantors, Atlas Commercial Lending Corp., as administrative agent and collateral agent, and the lenders party thereto, will be repaid in full. The aggregate amount of the Company's outstanding indebtedness under the Existing Credit Agreement as of the date of the Merger Agreement is approximately $820,000,000, consisting of approximately $620,000,000 outstanding under the term loan facility and approximately $200,000,000 drawn under the revolving credit facility. The consummation of the Merger constitutes a "change of control" (as defined in the Existing Credit Agreement) and triggers mandatory prepayment of all outstanding indebtedness thereunder. At closing, Parent will cause the surviving company to use a portion of the proceeds from the Term Loan B Facility to satisfy such repayment obligations in full.
Sources and Uses
The following table sets forth the estimated sources and uses of funds in connection with the Merger:
Sources
Uses
Regulatory Approvals.  The consummation of the Merger is conditioned upon the receipt of certain regulatory approvals. The parties intend to file a Pre-Merger Notification and Report Form under the HSR Act with the Federal Trade Commission (the "FTC") and the Antitrust Division of the United States Department of Justice (the "DOJ") as promptly as practicable following the date of the Merger Agreement. The initial waiting period under the HSR Act is thirty (30) days from the date of filing, subject to early termination or extension by issuance of a request for additional information (a "Second Request").
In addition, the parties intend to submit a Merger Notice Form to the UK Competition and Markets Authority in accordance with the Enterprise Act 2002. The CMA's Phase 1 review period is forty (40) working days from the date of notification. Based on the assessment of the parties and their respective legal advisors, a voluntary notice to the Committee on Foreign Investment in the United States ("CFIUS") is not expected to be submitted, as no national security nexus has been identified in connection with the transactions contemplated by the Merger Agreement. Furthermore, no merger filing with the European Commission is required, as the Company's revenues attributable to EU member states are below the applicable thresholds under Council Regulation (EC) No. 139/2004 (the "EU Merger Regulation").
Other Agreements Executed Concurrently
In connection with the execution of the Merger Agreement, the parties entered into the following additional agreements:
Voting and Support Agreements. Concurrently with the execution of the Merger Agreement, each of Jonathan Hargrove (holding approximately 4.2% of the outstanding shares of Cloudium common stock) and Pinnacle Growth Ventures LLC (holding approximately 11.6% of the outstanding shares of Cloudium common stock) entered into Voting and Support Agreements (the "Support Agreements") with Parent, pursuant to which each such stockholder agreed to, among other things: (i) vote all of its shares of Cloudium common stock in favor of the adoption of the Merger Agreement and the approval of the Merger; (ii) vote all of its shares against any alternative acquisition proposal or any other proposal, action, or agreement that would reasonably be expected to impede, interfere with, delay, postpone, discourage, or adversely affect the Merger; and (iii) refrain from transferring any of its shares of Cloudium common stock prior to the earlier of the Effective Time and the valid termination of the Merger Agreement, subject to customary exceptions. The shares subject to the Support Agreements represent, in the aggregate, approximately 15.8% of the outstanding shares of Cloudium common stock.
Rollover Agreements. The Rollover Agreements entered into with Mr. Hargrove and Pinnacle are described in "— Rollover Equity" above.
Non-Competition and Non-Solicitation Agreements. Concurrently with the execution of the Merger Agreement, each of Jonathan Hargrove, the Company's Chief Executive Officer, and Sienna Whitfield, the Company's Chief Financial Officer, entered into Non-Competition and Non-Solicitation Agreements (the "Non-Compete Agreements") with Parent, pursuant to which each such executive has agreed to customary non-competition and non-solicitation restrictions for a period of twenty-four (24) months following the closing of the Merger.
Escrow Agreement. The parties have agreed upon a form of Escrow Agreement (the "Escrow Agreement") among Parent, Cobalt Trust Company, N.A. (as escrow agent), and the Stockholder Representative, which will become effective at the closing of the Merger and which governs the terms and conditions of the escrow described in "— Escrow" above.
Stockholder Representative Agreement. The parties have entered into a Stockholder Representative Agreement appointing Douglas Pemberton as the Stockholder Representative to act on behalf of the former stockholders of Cloudium following the closing of the Merger, with authority to take all actions and make all decisions necessary or appropriate in connection with the Escrow Agreement, the indemnification provisions of the Merger Agreement, and any other post-closing matters on behalf of the former stockholders.
Representation and Warranty Insurance
In connection with the Merger, Parent has obtained a buyer-side representation and warranty insurance policy (Policy No. NFA-TRI-2024-00487) from Northfield Assurance Ltd. (the "R&W Policy"). The R&W Policy has a total aggregate policy limit of $680,000,000, representing approximately 10% of the Aggregate Deal Value. The R&W Policy provides excess coverage above the Escrow Amount ($544,000,000, which serves as the retention under the policy) for breaches of the representations and warranties of the Company contained in Article IV of the Merger Agreement, subject to certain customary exclusions and limitations set forth in the R&W Policy. The premium for the R&W Policy is $13,600,000, which was paid by Parent. The R&W Policy was bound on January 19, 2024, and will become effective upon the closing of the Merger.
Copy of the Merger Agreement
The foregoing description of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is filed as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference. Stockholders and other interested parties are urged to read the Merger Agreement in its entirety for a more complete description of the terms and conditions of the Merger.
The Merger Agreement has been included to provide investors and stockholders with information regarding the terms of the Merger. It is not intended to provide any other factual information about the Company, Parent, or Merger Sub or any of their respective subsidiaries or affiliates. The representations, warranties, and covenants contained in the Merger Agreement were made only for the purposes of the Merger Agreement as of the specific dates therein, were solely for the benefit of the parties to the Merger Agreement, may be subject to limitations agreed upon by the contracting parties (including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts), and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors and stockholders are not third-party beneficiaries under the Merger Agreement and should not rely on the representations, warranties, and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of any of the parties to the Merger Agreement or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company's public disclosures.
Item 2.01 Completion of Acquisition or Disposition of Assets.
Not applicable. The Merger has not yet been consummated. This Item 2.01 will be reported upon the closing of the Merger, if and when it occurs.
Item 5.01 Changes in Control of Registrant.
Not applicable at this time. The change of control of the Company will occur upon the consummation of the Merger, which is expected in mid-2024, subject to the satisfaction or waiver of the conditions described above under Item 1.01. The Company will file an amendment to this Current Report on Form 8-K or a separate Current Report on Form 8-K to report the change of control at the appropriate time.
Item 8.01 Other Events.
Press Release.  On January 23, 2024, the Company issued a press release announcing the execution of the Merger Agreement. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Additional Information and Where to Find It
In connection with the proposed Merger, the Company intends to file a proxy statement on Schedule 14A (the "Proxy Statement") with the U.S. Securities and Exchange Commission (the "SEC"). The definitive Proxy Statement will be mailed to the stockholders of record of the Company entitled to vote at the special meeting of stockholders to be convened for the purpose of voting on the adoption of the Merger Agreement and the approval of the Merger. Blackthorn Proxy Advisors LLC has been retained by the Company as proxy solicitor in connection with the solicitation of proxies for such special meeting.
INVESTORS AND STOCKHOLDERS OF THE COMPANY ARE URGED TO READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER AND RELATED MATTERS.
Investors and stockholders will be able to obtain free copies of the Proxy Statement and other documents filed with the SEC by the Company through the website maintained by the SEC at www.sec.gov or through the Company's website at www.cloudiumtech.com under the "Investors" tab. In addition, investors and stockholders may obtain free copies of the documents filed with the SEC by the Company by directing a written request to: Cloudium Technologies plc, Attention: Investor Relations, 600 Townsend Street, Suite 800, San Francisco, CA 94103, or by calling +1 (415) 555-0198.
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 proposed Merger. Information about the Company's directors and executive officers and their ownership of the Company's common stock is set forth in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2023, filed with the SEC on December 14, 2023, and the Company's proxy statement on Schedule 14A for its 2023 annual meeting of stockholders, filed with the SEC on January 8, 2024. Additional information regarding the interests of participants in the solicitation of proxies in connection with the proposed Merger will be included in the Proxy Statement and other relevant materials when they are filed with the SEC. The Company's directors and executive officers who may be deemed to be participants in the solicitation include:
Directors: Douglas Pemberton (Board Chair, independent); Evelyn Carmichael (designee of Pinnacle Growth Ventures LLC); Rafael Montoya (designee of Pinnacle Growth Ventures LLC); Dr. Amara Osei (independent); William Stratton (independent); Mei-Lin Chen (independent); and Jonathan Hargrove (CEO).
Executive Officers: Jonathan Hargrove (Chief Executive Officer); Sienna Whitfield (Chief Financial Officer); Nadia Chowdhury (General Counsel and Secretary); Marcus Tan (Chief Technology Officer); and Laura Eichinger (Chief Revenue Officer).
Pinnacle Growth Ventures LLC (Evelyn Carmichael, Managing Member) holds approximately 11.6% of the outstanding shares of Cloudium common stock and holds two seats on the Board, as noted above.
Free copies of these documents may be obtained as described above.
Cautionary Statement Regarding Forward-Looking Statements
This Current Report on Form 8-K (including the press release furnished as Exhibit 99.1 hereto) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements include, but are not limited to, statements regarding: the proposed Merger, including the expected timing of the completion of the Merger; the ability to complete the Merger considering the various closing conditions, including the receipt of Cloudium stockholder approval and regulatory approvals under the HSR Act and from the UK CMA; the expected benefits and impact of the proposed Merger on the Company and its stockholders; the availability and terms of the debt financing; the ability of Parent to fund the equity commitment; the anticipated post-closing operations, strategy, and management of the surviving company; and any other statements that relate to non-historical facts. These forward-looking statements are based on the Company's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements.
Factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to: (i) the failure to obtain required stockholder approval for the Merger; (ii) the failure to obtain, or delays in obtaining, required regulatory approvals under the HSR Act, from the UK CMA, or from any other governmental authority, or the imposition of conditions or restrictions in connection with the receipt of such approvals that could be burdensome or materially adverse to the Company or to the combined business following completion of the Merger; (iii) the failure to satisfy other closing conditions to the Merger; (iv) risks related to the debt financing, including the possibility that the committed debt financing may not be funded on the terms described herein, or at all; (v) the occurrence of any event, change, or other circumstance that could give rise to a termination of the Merger Agreement or a Material Adverse Effect; (vi) the potential for competing acquisition proposals; (vii) the potential adverse effects on the Company's business, operating results, and financial condition, including the potential adverse effects on the Company's relationships with its customers, suppliers, employees, and other stakeholders, resulting from the announcement or pendency of the Merger; (viii) the risk of stockholder, regulatory, or other litigation in connection with the proposed Merger; (ix) the diversion of management's time and attention to the proposed Merger; (x) the amount of the costs, fees, expenses, and charges related to the Merger; and (xi) other risks and uncertainties described in the Company's filings with the SEC, including the "Risk Factors" sections of the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2023 and the Company's Quarterly Reports on Form 10-Q.
The forward-looking statements in this Current Report on Form 8-K speak only as of the date on which such statements are made. The Company undertakes no obligation to update or revise any forward-looking statements to reflect events or circumstances after the date of this Current Report on Form 8-K or to reflect new information, actual results, revised expectations, or the occurrence of unanticipated events, except as may be required under applicable securities laws.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.  
\* Certain schedules and exhibits to the Merger Agreement have been omitted in accordance with Item 601(a)(5) of Regulation S-K. The Company hereby agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon its request.
\\ Furnished, not filed.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CLOUDIUM TECHNOLOGIES PLC
By: ________
Name: Nadia Chowdhury
Title: General Counsel and Secretary
Date: January 23, 2024
EXHIBIT 99.1
PRESS RELEASE
FOR IMMEDIATE RELEASE January 23, 2024
Cloudium Technologies plc to Be Acquired by Solara Digital Infrastructure Fund VI LP for Approximately $6.8 Billion
Cloudium stockholders to receive $36.92 per share in cash
Transaction unanimously approved by the Cloudium Board of Directors
CEO Jonathan Hargrove and significant shareholder Pinnacle Growth Ventures LLC to roll over equity into the surviving entity
LONDON and SAN FRANCISCO — January 23, 2024 — Cloudium Technologies plc (Nasdaq: CLDM) ("Cloudium" or the "Company"), a leading provider of cloud-native enterprise resource planning (ERP), customer-relationship management (CRM), and business-intelligence software-as-a-service (SaaS) solutions, today announced that it has entered into a definitive Agreement and Plan of Merger (the "Merger Agreement") to be acquired by Solara Digital Infrastructure Fund VI LP ("Fund VI"), an investment fund managed by Solara Digital Infrastructure LP ("Solara"), a leading private equity firm focused on digital infrastructure and enterprise software assets. Under the terms of the Merger Agreement, Cloudium stockholders will receive $36.92 per share in cash, representing an aggregate equity value of approximately $6.8 billion.
The Per Share Merger Consideration of $36.92 per share represents a premium of approximately 32% over Cloudium's unaffected closing stock price of $27.97 per share on November 17, 2023, the last full trading day prior to published market speculation regarding a potential transaction involving the Company, and a premium of approximately 28% over the 30-day volume-weighted average price of $28.84 per share for the period ending on November 17, 2023.
The transaction values Cloudium at approximately 16.8 times the Company's last twelve months ("LTM") Adjusted EBITDA of $405,000,000 for the fiscal year ended September 30, 2023. The Company reported LTM revenue of $1,620,000,000 for the fiscal year ended September 30, 2023, and annual recurring revenue ("ARR") of $1,740,000,000 as of December 31, 2023.
Jonathan Hargrove, the Company's Chief Executive Officer, who holds approximately 4.2% of the outstanding shares, and Pinnacle Growth Ventures LLC ("Pinnacle"), a significant existing stockholder holding approximately 11.6% of the outstanding shares, have each agreed to roll over a portion of their equity holdings into the surviving entity, demonstrating their continued confidence in the long-term growth prospects of the business.
The Merger Agreement was unanimously approved by the Cloudium Board of Directors, following a comprehensive review process conducted with the assistance of independent financial and legal advisors.
Transaction Details
Under the terms of the Merger Agreement, a wholly owned subsidiary of Fund VI will merge with and into Cloudium, with Cloudium surviving the merger as a wholly owned subsidiary of Fund VI. Each outstanding share of Cloudium common stock (other than shares held by the rollover participants, shares held in treasury, and dissenting shares) will be converted into the right to receive $36.92 per share in cash, without interest.
The transaction is expected to be funded through a combination of equity contributed by Fund VI and committed debt financing provided by Meridian Atlantic Bank, N.A., as lead arranger, and Ironclad Capital Markets LLC, as co-arranger, consisting of a $3,740,000,000 Term Loan B facility and a $500,000,000 revolving credit facility.
Completion of the transaction is expected in mid-2024, subject to the approval of Cloudium's stockholders, the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, clearance by the United Kingdom Competition and Markets Authority, and the satisfaction of other customary closing conditions. The transaction is not subject to a financing condition.
Comments from the Cloudium Board and Management
Douglas Pemberton, the independent Board Chair of Cloudium, stated: "This transaction is the result of a thorough and deliberate review process undertaken by the Board, with the assistance of independent financial and legal advisors, to evaluate the best path forward for Cloudium and its stockholders. The Per Share Merger Consideration of $36.92 represents a compelling premium and delivers significant, immediate, and certain cash value to our stockholders. After careful consideration of the Company's standalone prospects, the current market environment, and the terms of the proposed transaction, the Board unanimously determined that this merger is in the best interests of Cloudium and its stockholders, and we recommend that stockholders vote in favor of the transaction."
Jonathan Hargrove, Chief Executive Officer of Cloudium, commented: "I am excited about the opportunity to partner with Solara to take Cloudium to the next level. Over the past decade, we have built Cloudium into a market-leading cloud-native platform, and Solara shares our vision for the enormous growth opportunity ahead of us. My decision to roll over a meaningful portion of my equity holdings into the combined entity reflects my deep conviction in Cloudium's future. With Solara's proven track record of investing in and scaling enterprise software businesses, and with their operational resources and capital to support continued innovation and expansion, I am confident that Cloudium will be well-positioned to accelerate product development, enter new markets, and deliver even greater value to our customers, employees, and partners."
Marcus Elliston, Founder and Managing Partner of Solara Digital Infrastructure LP, added: "We have long admired Cloudium's market-leading position in cloud-native ERP, CRM, and business intelligence solutions, and we are thrilled to have the opportunity to partner with Jonathan and the entire Cloudium team. Cloudium has built a differentiated, mission-critical platform that serves as the backbone of its customers' businesses, and we see tremendous opportunity to invest in Cloudium's technology, expand its product suite, and accelerate its international growth. With approximately $38 billion in assets under management and a proven track record across fourteen platform investments in our Fund IV, Fund V, and Fund VI vehicles, Solara is uniquely positioned to support Cloudium's next chapter of growth. We are committed to investing in Cloudium's people and platform and look forward to working closely with the management team to realize the Company's full potential."
Advisors
Veridian Partners LLC is serving as the exclusive financial advisor to Cloudium and delivered a fairness opinion to the Cloudium Board of Directors on January 21, 2024. Ridgeway Phelps & Sato LLP is serving as legal counsel to Cloudium. Blackthorn Proxy Advisors LLC has been retained as proxy solicitor.
Osprey Bancroft & Co. is serving as financial advisor to Solara. Calderwood & Harkness LLP is serving as legal counsel to Solara.
Meridian Atlantic Bank, N.A. and Ironclad Capital Markets LLC have provided committed debt financing for the transaction.
About Cloudium Technologies plc
Cloudium Technologies plc (Nasdaq: CLDM) is a leading provider of cloud-native enterprise resource planning (ERP), customer-relationship management (CRM), and business-intelligence software-as-a-service (SaaS) solutions. Cloudium's integrated platform enables mid-market and enterprise customers to streamline operations, enhance customer engagement, and make data-driven decisions. The Company employs approximately 6,800 people globally, with operations in the United States, United Kingdom, India, and Germany. Cloudium is headquartered at 45 Broadwick Street, London W1F 0DB, United Kingdom, with US headquarters at 600 Townsend Street, Suite 800, San Francisco, CA 94103. For more information, please visit www.cloudiumtech.com.
About Solara Digital Infrastructure LP
Solara Digital Infrastructure LP is a leading private equity firm focused on digital infrastructure and enterprise software investments. Founded by Marcus Elliston and co-led by Priya Narasimhan (Co-Managing Partner & Chief Investment Officer), Solara manages approximately $38 billion in assets under management across six flagship funds. The investing fund for this transaction is Solara Digital Infrastructure Fund VI LP (vintage 2022; $12.4 billion committed capital). Solara's portfolio includes fourteen current platform investments across Fund IV, Fund V, and Fund VI, spanning cloud computing, cybersecurity, data analytics, and enterprise SaaS. Solara is headquartered at 1200 Market Street, Suite 3400, Wilmington, DE 19801. For more information, please visit www.solaradigital.com.
Additional Information and Where to Find It
In connection with the proposed Merger, Cloudium intends to file a proxy statement on Schedule 14A (the "Proxy Statement") with the U.S. Securities and Exchange Commission (the "SEC"). The definitive Proxy Statement will be mailed to the stockholders of record of Cloudium entitled to vote at the special meeting of stockholders to be convened for the purpose of voting on the adoption of the Merger Agreement and the approval of the Merger.
INVESTORS AND STOCKHOLDERS OF CLOUDIUM ARE URGED TO READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER AND RELATED MATTERS.
Investors and stockholders will be able to obtain free copies of the Proxy Statement and other documents filed with the SEC by Cloudium through the website maintained by the SEC at www.sec.gov or through the Company's website at www.cloudiumtech.com under the "Investors" tab. In addition, investors and stockholders may obtain free copies of the documents filed with the SEC by Cloudium by directing a written request to: Cloudium Technologies plc, Attention: Investor Relations, 600 Townsend Street, Suite 800, San Francisco, CA 94103, or by calling +1 (415) 555-0198.
Participants in the Solicitation
Cloudium 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 proposed Merger. Information about the Company's directors and executive officers and their ownership of the Company's common stock is set forth in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2023, filed with the SEC on December 14, 2023, and the Company's proxy statement on Schedule 14A for its 2023 annual meeting of stockholders, filed with the SEC on January 8, 2024. Additional information regarding the interests of participants in the solicitation of proxies in connection with the proposed Merger will be included in the Proxy Statement and other relevant materials when they are filed with the SEC. Free copies of these documents may be obtained as described above.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements include, but are not limited to, statements regarding: the proposed Merger, including the expected timing of the completion of the Merger; the ability to complete the Merger considering the various closing conditions; the expected benefits and impact of the proposed Merger on the Company and its stockholders; the anticipated post-closing operations, strategy, and management of the surviving company; and any other statements that relate to non-historical facts. These forward-lookin

FORM 8-K

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CLOUDIUM TECHNOLOGIES PLC

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CLOUDIUM TECHNOLOGIES PLC

EXHIBIT 99.1

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