Clarivate Announces New $500 Million Share Repurchase Authorization

Rhea-AI Summary

Clarivate (NYSE:CLVT) has announced a new $500 million share repurchase program for its outstanding ordinary shares, effective from January 1, 2025, through December 31, 2026. This program replaces the current one ending December 31, 2024, under which the company repurchased $300 million of shares, including $200 million in Q3-Q4 2024.

Additionally, Clarivate has prepaid $75 million of term-loan debt in Q4, bringing total 2024 prepayments to $133 million. The new buyback program, part of the company's Value Creation Plan, allows for open-market purchases through various methods, including Rule 10b5-1 trading plans, subject to market conditions and regulatory requirements.

Positive

• Authorization of new $500 million share repurchase program for 2025-2026
• Successful completion of previous $300 million buyback program
• Debt reduction through $133 million in loan prepayments during 2024

Negative

• None.

Insights

Financial Analyst

The $500 million share repurchase authorization represents approximately 13.7% of Clarivate's current market cap, signaling a significant commitment to shareholder returns. The company's successful execution of its previous $300 million buyback program and additional $133 million in debt prepayment demonstrates strong cash flow generation and financial flexibility. The dual focus on share repurchases and deleveraging reflects a balanced capital allocation strategy that should strengthen the balance sheet while potentially providing support for the stock price.

The two-year timeframe provides management with flexibility to opportunistically execute purchases, which is particularly valuable given current market volatility. This authorization, combined with debt reduction efforts, suggests management's confidence in sustainable free cash flow generation and operational improvements from their Value Creation Plan. The program's discretionary nature allows Clarivate to adjust based on market conditions and alternative capital deployment opportunities.

Market Research Analyst

This announcement sends a strong positive signal about Clarivate's financial health and management's view of the stock's intrinsic value. The increased size of the new buyback program ($500 million vs. previous $300 million) suggests leadership sees the shares as undervalued at current levels. The timing is strategic, as it provides continuity with the expiring program while demonstrating progressive expansion of shareholder returns. The concurrent debt prepayment of $75 million this quarter shows the company isn't sacrificing balance sheet strength for buybacks, which should resonate well with institutional investors concerned about financial stability in the current macro environment.

LONDON, Dec. 16, 2024 /PRNewswire/ -- Clarivate Plc (NYSE:CLVT) (the "Company" or "Clarivate"), a leading global provider of transformative intelligence, today announced that its Board of Directors (the "Board") authorized a new share repurchase program of up to $500 million of the Company's outstanding ordinary shares through open-market purchases for a period of two years, from January 1, 2025 through December 31, 2026.

The new share repurchase program replaces the current share repurchase program which terminates December 31, 2024, under which the Company repurchased $300 million of ordinary shares, including $200 million during the third and fourth quarters of 2024.

Clarivate also announced that it prepaid $75 million of term-loan debt so far during the fourth quarter, bringing total prepayments in 2024 to $133 million.

"As we execute against our Value Creation Plan, we expect to deploy capital to the most value enhancing opportunities," said Matti Shem Tov, Chief Executive Officer of Clarivate. "This new repurchase program is in line with this goal and reflects the Clarivate Board's strong confidence in the Company's ability to drive growth and enhanced financial performance. We will continue to maintain a balanced approach to our capital allocation program that includes returning capital to shareholders through repurchases and deleveraging."

The new share repurchase program does not obligate Clarivate to repurchase any set dollar amount or number of shares and may be modified, suspended, or terminated at any time without prior notice. Under the new share repurchase program, Clarivate is authorized to conduct open-market purchases of its ordinary shares from time to time through any method or program, including through Rule 10b5-1 trading plans or the use of other techniques as permitted by its shareholder authorization, approved by the Board or a designated committee thereof, and subject to availability of ordinary shares, price, market conditions, alternative uses of capital, and applicable regulatory requirements, at management's discretion.

Forward-Looking Statements
This communication includes statements that express our opinions, expectations, beliefs, plans, objectives, assumptions, or projections regarding future events or future results and therefore are, or may be deemed to be, "forward-looking statements" within the meaning of the "safe harbor provisions" of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms "believes," "estimates," "anticipates," "expects," "seeks," "projects," "intends," "plans," "may," "will," or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts, and include statements regarding our intentions, beliefs, or current expectations concerning, among other things, anticipated cost savings, results of operations, financial condition, liquidity, prospects, growth, strategies, and the markets in which we operate. Such forward-looking statements are based on available current market material and management's expectations, beliefs, and forecasts concerning future events impacting us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks and uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in Item 1A. Risk Factors of our annual report on Form 10-K. Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. Please consult our public filings with the SEC or on our website at www.clarivate.com.

About Clarivate
Clarivate™ is a leading global provider of transformative intelligence. We offer enriched data, insights & analytics, workflow solutions and expert services in the areas of Academia & Government, Intellectual Property and Life Sciences & Healthcare. For more information, please visit www.clarivate.com.

 

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SOURCE Clarivate Plc

FAQ

How much is Clarivate's new share repurchase program worth and when does it start?

Clarivate's new share repurchase program is worth $500 million and runs from January 1, 2025, through December 31, 2026.

How much did CLVT repurchase under its current buyback program in 2024?

Under the current program ending December 31, 2024, Clarivate repurchased $300 million of ordinary shares, with $200 million during Q3 and Q4 2024.

How much debt did Clarivate prepay in Q4 2024?

Clarivate prepaid $75 million of term-loan debt in Q4 2024, bringing total prepayments for 2024 to $133 million.

Is CLVT obligated to complete the entire $500 million share repurchase?

No, the program does not obligate Clarivate to repurchase any set dollar amount or number of shares and can be modified, suspended, or terminated at any time.