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United States securities and exchange commission logo
June 24, 2021
Jason Krantz
Chief Executive Officer
Definitive Healthcare Corp.
550 Cochituate Rd
Framingham, MA 01701
Re: Definitive
Healthcare Corp.
Draft Registration
Statement on Form S-1
Submitted May 28,
2021
CIK No. 0001861795
Dear Mr. Krantz:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form S-1 filed May 28, 2021
Prospectus Summary, page 1
1. Please modify the chart
that appears on pages 3 and 84 to also disclose your net losses for
2019 and 2020.
Risk Factors
The disparity in the voting rights among the classes of our common
stock..., page 55
2. As your Class A and
Class B common stock appear to have the same voting rights, please
explain the risk to
investors that is being addressed in this risk factor.
Jason Krantz
FirstName LastNameJason
Definitive Healthcare Corp.Krantz
Comapany
June NameDefinitive Healthcare Corp.
24, 2021
June 24,
Page 2 2021 Page 2
FirstName LastName
Unaudited Pro Forma Consolidated Financial Information
Notes to Unaudited Pro Forma Consolidated Financial Information (Year Ended
December 31,
2020), page 79
3. Please expand Note (5) so that your calculation of the adjustment
amount is transparent.
In this regard, please quantify the remaining unpaid balance of the
indebtedness, the
applicable interest rate, and any additional charges such as for
breakage.
4. Please tell us how you considered pro forma effects of the
reorganization and initial public
offering on unvested performance-based units (2019 Equity Incentive
Plan).
Notes to Unaudited Pro Forma Consolidated Balance Sheet (as of , 2021), page 83
5. Refer to Note (4). Please disclose the underlying favorable tax
attributes acquired from
the Blocker companies that form the basis for your calculation of the
deferred tax asset
and liabilities pursuant to the Tax Receivable Agreement.
6. Refer to Note (8). Please tell us the basis for your presentation of
contingently
redeemable noncontrolling interest as permanent equity. In your
response, please provide
us your analysis of the independence of the Board in relation to the
Pre-IPO LLC
members. In this regard, we note that a majority of your Board members
identified on
pages 124-126 currently serve in a capacity as Managing Director,
Managing Partner, or
Managing Director of your Pre-IPO LLC members, which include Advent,
Spectrum
Equity, and 22C Capital.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Key Metrics
Adjusted Gross Profit, page 87
7. Regarding your disclosure of Adjusted Gross Margin, please present
with equal or greater
prominence, the most directly comparable financial measure calculated
and presented in
accordance with GAAP. Also provide a reconciliation of each non-GAAP
financial
measure used in its calculation or advise us. Refer to Item
10(e)(1)(i)(A)-(B) of
Regulation S-K and footnote 27 of the SEC s Adopting Release titled
Conditions for Use
of Non-GAAP Financial Measures (Release No. 33-8176).
Adjusted EBITDA, page 88
8. Refer to footnote (d). For each period presented, please include
examples of
such expenses that are typically one-time or non-operational in
nature.
Components of our Results of Operations
Cost of Revenue, page 90
9. Please disclose how you account for the costs of your use of third
party subscription and
payment processing systems. We note your disclosure at the top of page
36.
Jason Krantz
FirstName LastNameJason
Definitive Healthcare Corp.Krantz
Comapany
June NameDefinitive Healthcare Corp.
24, 2021
June 24,
Page 3 2021 Page 3
FirstName LastName
Results of Operations
Year Ended December 31, 2020 Compared to Period from July 16, 2019 to December
31, 2019
(Successor) and Period..., page 93
10. Please disclose the number of your customers for each period and the
percentage of
revenue increase that is attributable to new versus existing
customers. Refer to Item
303(a)(3)(iii) of Regulation S-K and Section III.D of SEC No. Release
No. 33-6835.
Contractual Obligations and Commitments, page 98
11. We note that you referred to your potential obligations pursuant to
the Tax Receivable
Agreements upon the completion of this offering. Please also address
the cash redemption
option of the Pre-IPO LLC members who appear to control the majority
of the seats in
your Board of Directors.
Management
Directors and Executive Officers, page 122
12. Please disclose if any of your directors were nominated or serve based
on
any arrangement or understanding with major shareholders. In this
regard, we note that
Ms. Younag and Messrs. Egan and Maldonado are affiliated with Advent
International
Corporation, Messrs. Mitchell and Haywood are affiliated with Spectrum
Equity, and Mr,
Winn is affiliated with 22C Capital. Refer to Item 401(a) of
Regulation S-K.
Executive and Director Compensation
Narrative Discussion of the Summary Compensation Table, page 130
13. Per your disclosure, the Class B Units in AIDH Management Holdings,
LLC correspond
on a one-for-one basis to Class B Units issued by Definitive OpCo to
AIDH Management
Holdings, LLC. Please tell us, and disclose if so, whether the Class B
Units issued by
Definitive OpCo to AIDH Management Holdings LLC and Class B units in
AIDH
Management Holdings LLC include continued service conditions.
Description of Material Indebtedness
Financial Covenant, page 145
14. Please disclose the triggering event which will cause the springing
covenant ("Total
leverage ratio") to become effective. We note elsewhere in the filing
(page 50), you
indicated that the total leverage ratio is "tested as of the last day
of any fiscal quarter."
Additionally, disclose the terms of the equity cure rights.
Notes to the Consolidated Financial Statements
Note 3. Business Combinations, page F-25
15. Please disclose the performance targets for the Monacl acquisition
which trigger the
payment for contingent consideration with a potential value of up to
$15 million.
Jason Krantz
Definitive Healthcare Corp.
June 24, 2021
Page 4
Include an estimate of the range of outcomes (undiscounted) or, if a
range cannot be
estimated, that fact and the reasons why a range cannot be estimated.
Refer to ASC 805-
30-50-1(c)(3).
Item 16. Exhibits and Financial Statement Schedules, page II-3
16. Please file your material lease agreements and employment agreements
with your
executive officers as exhibits to the registration statement. Refer to
Item 601(b)(10) of
Regulation S-K.
General
17. Please update your filing to include financial statements for the
interim period ended
March 31, 2021.
18. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
You may contact Kathryn Jacobson, Senior Staff Accountant, at (202)
551-3365
or Robert Littlepage, Accounting Branch Chief, at (202) 551-3361 if you have
questions
regarding comments on the financial statements and related matters. Please
contact Matthew
Crispino, Staff Attorney, at (202) 551-3456 or Larry Spirgel, Office Chief, at
(202) 551-3815
with any other questions.
FirstName LastNameJason Krantz Sincerely,
Comapany NameDefinitive Healthcare Corp.
Division of
Corporation Finance
June 24, 2021 Page 4 Office of
Technology
FirstName LastName