Cannae : 2025 Q1 Cannae Shareholder Letter 2025.05.12 1219
CNNE
Published on 05/12/2025 at 16:17
This communication contains forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements regarding our expectations, hopes, beliefs, plans, intentions, or strategies regarding the future are forward-looking statements. Forward-looking statements are based on management's beliefs, as well as assumptions made by, and information currently available to, management, including statements about the completion of the Dun & Bradstreet ("D&B") and JANA transactions, our buyback program, the impact of our actions on shareholder value and net asset value, and our ability to implement our plans. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. Except as required by applicable law, we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The risks and uncertainties that forward-looking statements are subject to include, but are not limited to: 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 our outstanding debt and our capital allocation strategy; risks associated with the use of proceeds received as a result of the D&B and JANA transactions; risks associated with our ability to successfully operate businesses outside our traditional areas of focus; changes in general economic, business and political conditions, including among others, consumer spending, business investment, government spending, the volatility and strength of the capital markets, investor and consumer confidence, foreign currency exchange rates, commodity prices, inflation levels, changes in trade policy, tariffs on goods, and supply chain disruptions; risks associated with the Investment Company Act of 1940; risks associated with our potential inability to find suitable acquisition candidates, acquisitions in lines of business that will not necessarily be limited to our traditional areas of focus, or difficulties in integrating acquisitions; significant competition that our operating subsidiaries face; risks related to the externalization of certain of our management functions to an external manager, and risks associated with being the subject of a proxy contest.
This communication should be read in conjunction with the risks detailed in the "Statement Regarding Forward-Looking Information," "Risk Factors" and other sections of Cannae's Form 10-Q, 10-K and other filings with the Securities and Exchange Commission (the "SEC").
Cannae intends to file a proxy statement on Schedule 14A, an accompanying WHITE proxy card, and other relevant documents with the SEC in connection with the solicitation of proxies from Cannae's shareholders for Cannae's 2025 annual meeting of shareholders. CANNAE'S SHAREHOLDERS ARE STRONGLY ENCOURAGED TO READ CANNAE'S DEFINITIVE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO), THE ACCOMPANYING WHITE PROXY CARD, AND ANY OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Shareholders may
obtain a free copy of the definitive proxy statement, an accompanying WHITE proxy card, any amendments or supplements to the proxy statement, and other documents that Cannae files with the SEC at no charge from the SEC's website at https://www.sec.gov. Copies will also be available at no charge by clicking the "SEC Filings" link in the "Financials" section of Cannae's website at https://www.cannaeholdings.com/financial-information/sec-filings.
Cannae, its directors (William P. Foley, II; Douglas K. Ammerman; Hugh R. Harris; C. Malcolm Holland; Mark
D. Linehan; Frank R. Martire; Erika Meinhardt; Barry B. Moullet; William Royan; James B. Stallings, Jr.; Woodrow Tyler; and Frank P. Willey) and certain of its executive officers (Ryan R. Caswell, Chief Executive Officer; Bryan D. Coy, Chief Financial Officer; Peter T. Sadowski, Executive Vice President and Chief Legal Officer; and Michael L. Gravelle, Executive Vice President, General Counsel, and Corporate Secretary) and other employees may be deemed "participants" (as defined in Schedule 14A under the Exchange Act of 1934, as amended) in the solicitation of proxies from Cannae's shareholders in connection with the matters to be considered at Cannae's 2025 annual meeting of shareholders. Information regarding the names of Cannae's directors and executive officers and certain other individuals and their respective interests in Cannae, by security holdings or otherwise, is set forth in the sections entitled "Compensation Discussion and Analysis and Executive and Director Compensation," "Security Ownership of Certain Beneficial Owners, Directors and Executive Officers," and "Executive Compensation" of Cannae's Proxy Statement on Schedule 14A in connection with the 2024 annual meeting of shareholders, filed with the SEC on April 26, 2024 (available here), Cannae's Form 10-K/A, filed with the SEC on April 30, 2025 (available here), and Cannae's Annual Report on Form 10-K, filed with the SEC on February 27, 2025 (available here). To the extent the security holdings of directors and executive officers change since the amounts described in these filings, such changes will be set forth on Initial Statements of Beneficial Ownership on Form 3 or Statements of Change in Ownership on Form 4 filed with the SEC, which can be found at no charge at the SEC's website at https://www.sec.gov. Such filings will also be available at no charge by clicking the "SEC Filings" link in the "Financials" section of Cannae's website at https://www.cannaeholdings.com/financial-information/sec-filings.
Any subsequent updates following the date hereof to the information regarding the identity of potential participants and their direct or indirect interests, by security holdings or otherwise, will be set forth in Cannae's proxy statement on Schedule 14A and other materials to be filed with the SEC in connection with the 2025 annual meeting of shareholders, if and when they become available. These documents will be available free of charge as described above.
Fellow Shareholders,
Cannae Holdings, Inc.
Announced executive management succession:
William P. Foley, II, has transitioned as Cannae's CEO and Chairman of the Board and assumed the role of Vice Chairman of the Board
Cannae Board member Doug Ammerman has been appointed Chairman of the Board
Cannae President, Ryan R. Caswell, has been appointed as Chief Executive Officer
Following the recently announced sale of Dun & Bradstreet "(D&B"), Cannae announced its intended use of at least $460 Million of the $630 Million in expected total D&B proceeds for share repurchases, dividends, and debt repayment
Cannae has already sold 9 million shares of D&B for $81 Million ahead of transaction close
Cannae's Board appointed two additional independent directors, effective June 1, 2025, with significant investment and governance experience to enhance strategy
JANA Partners
On May 12, 2025, Cannae announced an expansion of its strategic relationship with JANA Partners ("JANA"), an investment firm focused on creating value through engaged investing
Cannae entered into an agreement to acquire an additional 30% stake in JANA, and post-closing will have total ownership of 50%, in exchange for an upfront payment of $67.5 million, with potential further payments aggregating $26 million upon certain future period Assets Under Management thresholds
This further investment enhances and expands Cannae's ability to allocate capital towards proprietary acquisition and investment opportunities that complement JANA's strategy and investment activities
This investment represents another step in Cannae's strategy of rebalancing its portfolio away from its current public company investments to attractive companies that produce cash flow
Black Knight Football
BKFC continues to make significant progress commercially, operationally and with its performance on the pitch
For the first time in its history, AFC Bournemouth made Sportico's 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 officially opened a new world class performance center for the first team and academy, which will be a marketing tool for the new players and enhance the development of its current squad and academy
AFC Bournemouth currently sits in 10th place with 53 points, which already surpasses the club's record points tally for a Premier League campaign with 2 games remaining. The club also matched its best ever finish in the FA Cup competition reaching the quarter finals
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. The team has 2 games remaining and is likely to qualify for European competition.
Dun & Bradstreet
Entered into a definitive agreement to be acquired by Clearlake Capital at a transaction value of
$7.7 Billion, including outstanding debt. At this value, Cannae expects to receive $630 Million of sale proceeds
The transaction is expected to close in the third quarter of 2025
Cannae expects to utilize at least $460 Million of these proceeds to repurchase at least $300 Million of its common shares, including through a tender offer, as well as repaying all $101 Million outstanding under its existing margin loan and retaining $60 Million for future quarterly dividends to shareholders
Cannae has already sold 9 million shares for $81 Million ahead of the transaction close
Announced 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
Alight
Revenue for the quarter ended March 31, 2025, was $548 Million compared to $559 Million reported for the prior year
Adjusted EBITDA improved slightly to $118 Million in the first quarter 2025, a $2 Million increase over $116 Million in the first quarter 2024
Adjusted EBITDA Margin expanded 70 basis points to 21.5% of revenue vs 20.8% in the prior year
The company repurchased $20 Million of its common stock during the quarter and has $261 Million of remaining share buyback authorization
Sincerely,
RYAN R. CASWELL
Chief Executive Officer
Disclaimer
Cannae Holdings Inc. published this content on May 12, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 12, 2025 at 20:16 UTC.