DEFA14A: Cannae Holdings Announces Executive Succession, Strategic Investment in JANA Partners, and Provides Portfolio Updates in First Quarter 2025

Cannae Holdings reports executive management changes, an increased stake in JANA Partners, and provides updates on its portfolio companies, including Dun & Bradstreet, Alight, System1, Black Knight Football, and Cannae Restaurant Group.

Summary

• Cannae Holdings announced executive management succession, with William P. Foley, II, transitioning to Vice Chairman, Doug Ammerman appointed Chairman, and Ryan R. Caswell appointed CEO.
• Cannae intends to use at least $460 million from the Dun & Bradstreet (D&B) sale proceeds for share repurchases, dividends, and debt repayment.
• Cannae has already sold 9 million shares of D&B for $81 million ahead of the transaction close.
• The company's board appointed two additional independent directors, effective June 1, 2025.
• Cannae announced an expansion of its strategic relationship with JANA Partners, acquiring an additional 30% stake for $67.5 million upfront, with potential further payments of $26 million based on future Assets Under Management thresholds.
• AFC Bournemouth made Sporticos' annual list of the World's 50 Most Valuable Football Clubs, with a valuation of $630 million based on the club's 2023/2024 revenue of $203 million.
• BKFC announced an agreement to acquire Vitality Stadium, AFC Bournemouth's home stadium since 1910, and will begin the process of expansion and redevelopment.
• AFC Bournemouth currently sits in 10th place with 53 points, surpassing the club's record points tally for a Premier League campaign.
• FC Lorient earned promotion back to Ligue 1, the highest level of the French football league system.
• Hibernian FC currently sits in 3rd place in the Scottish Premier League, its best result since the 2020/21 season.
• Dun & Bradstreet entered into a definitive agreement to be acquired by Clearlake Capital at a transaction value of $7.7 billion, including outstanding debt, with Cannae expecting to receive $630 million of sale proceeds.
• D&B reported first quarter 2025 total revenue of $580 million and organic revenue growth of 3.6%.
• First quarter 2025 Adjusted EBITDA grew 4.8% to $211 million for D&B.
• Alight's revenue for the quarter ended March 31, 2025, was $548 million compared to $559 million reported for the prior year.
• Alight's Adjusted EBITDA improved slightly to $118 million in the first quarter 2025.
• Alight's Adjusted EBITDA Margin expanded 70 basis points to 21.5% of revenue.
• Alight repurchased $20 million of its common stock during the quarter and has $261 million of remaining share buyback authorization.
• System1 reported total revenue of $75 million for the quarter ended March 31, 2025, a 12% decrease from the prior year, and a net loss of $20 million.
• System1's Adjusted EBITDA for the first quarter of 2025 was $12 million, compared to $0.4 million in the prior year.
• Cannae Restaurant Group reported total revenues of $99.1 million for the three months ended March 31, 2025, compared to $106.5 million in the prior year.
• Cannae Restaurant Group reported a net loss of $3.2 million for the three months ended March 31, 2025.
• Cannae has invested $224 million, representing an approximate 44% ownership interest in Black Knight Football.
• Cannae has invested $144 million in the Restaurant Group.

Sentiment

Score: 7

Explanation: The document presents a mixed but generally positive outlook. Executive changes are framed positively, and the D&B sale provides capital for shareholder returns. However, some portfolio companies face challenges, and risks are acknowledged.

Positives

• Executive management succession provides a clear path forward for Cannae Holdings.
• Planned use of D&B sale proceeds for share repurchases and debt repayment should enhance shareholder value.
• Strategic investment in JANA Partners expands Cannae's ability to allocate capital towards proprietary opportunities.
• AFC Bournemouth's increasing valuation and stadium acquisition indicate positive momentum for Black Knight Football.
• D&B's acquisition by Clearlake Capital provides a significant return on investment for Cannae.
• D&B's revenue and Adjusted EBITDA growth demonstrate solid performance.
• Alight's Adjusted EBITDA Margin expansion indicates improved profitability.
• System1's Adjusted EBITDA improvement suggests a turnaround in performance.
• FC Lorient earned promotion back to Ligue 1.

Negatives

• Alight's revenue decreased slightly compared to the prior year.
• System1 reported a net loss of $20 million for the quarter.
• Cannae Restaurant Group faced headwinds in same-store sales and guest counts.
• Cannae Restaurant Group reported a net loss of $3.2 million for the three months ended March 31, 2025.
• Restaurant Group's Adjusted EBITDA was negative at $(0.6) million.

Risks

• The occurrence of any event, change, or other circumstances that could give rise to the termination or inability to complete the D&B and JANA transactions.
• Risks associated with repayment of Cannae's outstanding debt and its capital allocation strategy.
• Risks associated with the use of proceeds received as a result of the D&B and JANA transactions.
• Risks associated with Cannae's ability to successfully operate businesses outside its traditional areas of focus.
• Changes in general economic, business, and political conditions.
• Significant competition that Cannae's operating subsidiaries face.
• Risks related to the externalization of certain of Cannae's management functions to an external manager.
• Risks associated with being the subject of a proxy contest.

Future Outlook

Alight provided guidance for 2025, projecting revenue between $2.32 billion and $2.39 billion, Adjusted EBITDA between $620 million and $645 million, and Free Cash Flow between $250 million and $285 million. Alight also issued mid-term financial targets, projecting total annual growth rates of 4-6% by 2027, Adjusted EBITDA margins of approximately 30% by 2027, and cumulative free cash flow of approximately $1 Billion between 2025 and 2027.

Management Comments

• Ryan R. Caswell stated he is grateful to Bill for his mentorship and all that he has provided to Cannae and its portfolio companies.
• Ryan R. Caswell stated that Cannae has made great progress and has significant opportunities to increase shareholder value.
• Ryan R. Caswell looks forward to working with the Board, portfolio companies, and shareholders to execute the strategy Bill laid out and position Cannae for long term success as a permanent capital vehicle.

Industry Context

Cannae's investment strategy focuses on acquiring and managing businesses across various sectors, including technology, finance, and sports. The company's increased investment in JANA Partners reflects a broader trend of investment firms seeking to diversify their asset management capabilities. The performance of Cannae's portfolio companies, such as D&B and Alight, is influenced by macroeconomic factors and industry-specific trends, including digital transformation and the demand for data and analytics.

Comparison to Industry Standards

• D&B's organic revenue growth of 3.6% is comparable to other data and analytics providers, such as Experian and Equifax, which have also reported steady growth in recent periods.
• Alight's Adjusted EBITDA margin of 21.5% is in line with other human capital management (HCM) technology and services providers, such as ADP and Workday.
• AFC Bournemouth's valuation of $630 million places it among the top 50 most valuable football clubs globally, alongside established brands like Manchester United and Real Madrid.
• System1's performance is being compared to other companies in the digital advertising space, such as Perion Network and Taboola.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders will benefit from the planned share repurchases and dividends using proceeds from the D&B sale.
• Employees of AFC Bournemouth will benefit from the new world-class performance center.
• Customers of the Restaurant Group may experience improved guest experience due to leadership changes and operational focus.
• Employees of the Restaurant Group may be impacted by changes to leadership of RGS and OCharleys management team as well as regional and store-level management.

Next Steps

• Complete the acquisition of Dun & Bradstreet by Clearlake Capital in the third quarter of 2025.
• Utilize at least $460 million of the D&B sale proceeds for share repurchases, dividends, and debt repayment.
• Close the transaction to acquire an additional 30% stake in JANA Partners.
• Continue the process of expansion and redevelopment of Vitality Stadium for AFC Bournemouth.
• Prepare FC Lorient for its return to Ligue 1.
• Continue to execute a long-term plan focused on increasing same-store sales, enhancing the guest experience, and continued rationalizing of support costs for the Restaurant Group.

Key Dates

Keywords

Cannae Holdings, Dun & Bradstreet, Alight, System1, Black Knight Football, JANA Partners, AFC Bournemouth, Executive Succession, Share Repurchase, Acquisition, EBITDA, Revenue, Investment