TechTarget, Inc. 10-Q

Item 1. Financial Statements (Unaudited) Toro CombineCo, Inc. Condensed Consolidated Balance She ets September 30, January 4, 2024 2024 (Unaudited) (Unaudited) ASSETS Total assets $ —   $ —   LIABILITIES AND EQUITY Total liabilities —   —   Equity Common stock, $ 0.001 par value; 1,000 authorized, issued and outstanding 1 1 Stockholder receivable ( 1 ) ( 1 ) Additional paid-in-capital —   —   Total equity —   —   Total liabilities and equity $ —   $ —   See accompanying Notes to Unaudited Condensed Consolidated Financial Statements. 1 Table of Contents Toro CombineCo, Inc. Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2024 2024 (Unaudited) (Unaudited) Revenue $ —   $ —   Cost of revenue —   —   Gross profit —   —   Operating expenses —   —   Earnings from operations —   —   Other expenses, net —   —   Earning before income taxes —   —   Provision for income taxes —   —   Net income (loss) $ —   $ —   Other comprehensive income (loss), net of tax —   —   Comprehensive income (loss) $ —   $ —   Net earnings per share, basic and diluted $ —   $ —   Weighted average common shares outstanding, basic and diluted 1,000 1,000 See accompanying Notes to Condensed Consolidated Financial Statements. 2 Table of Contents Toro CombineCo, Inc. Condensed Consolidated Statements of Equi ty Three months ended September 30, Nine Months ended September 30, 2024 2024 (Unaudited) (Unaudited) Common stock Beginning balance $ 1 $ —   Shares issued —   1 Ending balance 1 1 Shareholders receivable Beginning balance $ ( 1 ) $ —   Activity —   $ ( 1 ) Ending balance ( 1 ) ( 1 ) Additional paid-in capital —   —   Total equity $ —   $ —   See accompanying Notes to Condensed Consolidated Financial Statements. 3 Table of Contents Toro CombineCo, Inc. Condensed Consolidated Statements of Cash Flows Nine Months Ended September 30, 2024 Operating Activities: Net cash provided by operating activities $ —   Investing Activities: Net cash provided by (used in) investing activities —   Financing Activities: Net cash provided by (used in) financing activities —   Effect of exchange rate changes on cash and cash equivalents —   Increase (Decrease) in cash and cash equivalents —   Beginning cash and equivalents —   Ending cash and equivalents $ —   See accompanying Notes to Condensed Consolidated Financial Statements. 4 Table of Contents Toro CombineCo, Inc. Notes to Condensed Consolidated Financial Statements (In thousands, except share and per share data, where otherwise noted, or instances where expressed in millions) 1. Organization and Operations Toro CombineCo, Inc. (“CombineCo”), a direct, wholly owned subsidiary of TechTarget, Inc. (“TechTarget”), is a Delaware corporation that was formed on January 4, 2024 by TechTarget for the purpose of engaging in the Transactions discussed herein. On January 10, 2024, TechTarget, CombineCo, Toro Acquisition Sub, LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of CombineCo (“Merger Sub”), Informa PLC, a public limited company organized under the laws of England and Wales (“Informa”), Informa US Holdings Limited, a private company organized under the laws of England and Wales and an indirect, wholly owned subsidiary of Informa (“Informa HoldCo”), and Informa Intrepid Holdings Inc., a Delaware corporation and a direct, wholly owned subsidiary of Informa HoldCo (“Informa Intrepid”), entered into an Agreement and Plan of Merger (as it may be amended, modified or supplemented from time to time, the “Transaction Agreement”) to combine the digital businesses of Informa’s Informa Tech division (collectively, the “Informa Tech Digital Businesses”) and TechTarget under a new publicly traded company (collectively, the “Transactions”). A special meeting of TechTarget stockholders will be held on November 26, 2024 at 10:00 a.m., Eastern time, at the offices of Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109, for the following purposes: 1. To adopt the Transaction Agreement. 2. To approve, on a non-binding, advisory basis, the compensation that will or may become payable to TechTarget’s named executive officers in connection with the Transactions, including the Merger. 3. To approve and adopt the proposed TechTarget, Inc. 2024 Incentive Plan. 4. To approve and adopt the proposed TechTarget, Inc. 2024 Employee Stock Purchase Plan. 5. To adjourn TechTarget’s special meeting if TechTarget determines it is necessary to permit further solicitation of proxies in the event there are not sufficient votes at the time of the special meeting to adopt the Transaction Agreement (such meeting, including any adjournment or postponement thereof, the “special meeting”). If the Transactions are consummated, CombineCo will change its registered name with the Secretary of State of the State of Delaware to “TechTarget, Inc.” (which we refer to the renamed, post-closing CombineCo as “NewCo”). TechTarget will change its registered name with the Secretary of State of the State of Delaware to “TechTarget Holdings Inc.” and the TechTarget common stock will be delisted from The Nasdaq Global Market (“Nasdaq”) and deregistered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and cease to be publicly traded. Immediately following the closing of the Transactions (the “Closing”), NewCo will own the assets of TechTarget and the Informa Tech Digital Businesses. In connection with the Closing, (i) Informa HoldCo will contribute to CombineCo all of the issued and outstanding shares of capital stock of Informa Intrepid and $ 350 million in cash, in exchange for NewCo common stock common stock, par value $ 0.001 per share (“NewCo common stock”), (ii) Merger Sub will merge with and into TechTarget, with TechTarget surviving the merger and becoming a direct wholly owned subsidiary of NewCo (the “Merger”) and (iii) as a result of the Merger, each issued and outstanding share of TechTarget common stock will be converted (subject to certain exceptions) into the right to receive one share of NewCo common stock and a pro rata share of an amount in cash equal to $ 350 million. Informa HoldCo will own 57 % of the outstanding shares of NewCo common stock (on a fully diluted basis, but without taking into account shares which may be issued upon the conversion (if any) of the TechTarget convertible notes or shares reserved for future grants pursuant to certain NewCo equity incentive plans) and former TechTarget stockholders will own the remaining outstanding shares of NewCo common stock. NewCo intends to list the NewCo common stock on Nasdaq or such other U.S. national securities exchange as mutually agreed in writing by the parties to the Transaction Agreement, under TechTarget’s current stock ticker symbol “TTGT.” 5 Table of Contents 2. The Companies to the Transactions CombineCo / NewCo CombineCo is a Delaware corporation that was formed by TechTarget for the purpose of engaging in the Transactions. Since the date of its incorporation, CombineCo has not engaged in any activities other than as contemplated by the Transaction Agreement. At the completion of the Transactions, CombineCo will be renamed TechTarget, Inc. After the completion of the Transactions, NewCo will be a holding company whose principal assets will be (i) the company that today is TechTarget and (ii) the Informa Tech Digital Businesses. Immediately after the completion of the Transactions, NewCo’s equity capital will consist solely of the NewCo common stock issued pursuant to the Transactions. TechTarget TechTarget is a global data, software and analytics leader for purchase intent-driven marketing and sales data which delivers business impact for B2B companies. Its solutions are designed to enable B2B technology companies to identify, reach, and influence key enterprise technology decision makers faster and with higher efficacy. It offers products and services intended to improve IT vendors’ abilities to impact highly targeted audiences for business growth using advanced targeting, first-party analytics and data services complemented with customized marketing programs that integrate content creation, demand generation, brand marketing, and other advertising techniques. Merger Sub Toro Acquisition Sub, LLC has been formed solely for the purpose of engaging in the Transactions. Since the date of its formation, Merger Sub has not engaged in any activities other than as contemplated by the Transaction Agreement. Merger Sub is, and until the Closing will be, a Delaware limited liability company that is wholly and directly owned by CombineCo. At the Closing, Merger Sub will be merged with and into TechTarget and the separate legal existence of Merger Sub will end. Informa Informa PLC is a leading international B2B events, B2B digital services and academic markets group. It owns and operates a range of specialist brands that deliver unique connections, specialist data, information and intelligence to B2B companies, professionals, educational institutions, research funders and academics worldwide. Informa’s live and on-demand events bring together buyers, sellers and decision makers in one place and at one time to meet, discover and showcase products, trade and grow. Examples of such events include WasteExpo, BlackHat, Retail Asia Conference & Expo and CPHI North America. In B2B Markets, Informa has built a leading global platform for live and on-demand B2B events, connecting buyers and sellers across a range of specialist markets in person and online. Through specialist technology research, specialist media brands and first party B2B data, it also provides digital B2B solutions to enterprise technology vendors by delivering targeted audiences, highly qualified leads, demand generation and buyer intent that help identify, reach and influence key technology decision makers. Informa’s Academic Markets business, Taylor & Francis, is one of the world’s leading publishers of advanced, emerging and applied academic research and knowledge. Taylor & Francis works with leading experts and knowledge makers across a range of specialist subject categories spanning science, technology, medicine, humanities and social sciences, ensuring high quality research has an impact by being discovered by the right audience and contributing to human progress. Informa is listed on the London Stock Exchange and is a member of the FTSE 100 index. It operates in around 30 countries, with particular strengths in North America, IMEA (India, Middle East and Africa) and Asia. Over the last three years, Informa has invested in building a centralized customer data platform, known as IIRIS. This proprietary platform collates, standardizes, enriches, segments and analyses first party B2B data gathered from across Informa’s B2B portfolio of B2B brands, including through live and on-demand events, specialist research and our media brands. This includes both firmographic data from registrations and subscriptions and behavioral data from observing online interactions and engagement with our content. In total, Informa’s permissioned first party data audience is currently approximately 20 million. Informa HoldCo Informa US Holdings Limited is a wholly owned subsidiary of Informa that, as of immediately prior to the Closing, will hold all of the equity interests of Informa Intrepid. 6 Table of Contents Informa Intrepid and the Informa Tech Digital Businesses Informa Intrepid Holdings Inc. is a wholly owned subsidiary of Informa HoldCo that, as of immediately prior to the Closing, will hold directly or indirectly the Informa Tech Digital Businesses. The Informa Tech Digital Businesses help technology companies accelerate growth through first party B2B data, market insight and market access. Over the last five years, the Informa Tech Digital Businesses have built a strong position in B2B data, market insight and market access, expanding international reach and building a broader set of solutions and capabilities to serve both the buy-side and sell-side of the technology market. This portfolio of products helps both buyers of B2B technology with knowledge and intelligence, supporting them through different stages of the buyer journey, and sellers of B2B technology in identifying relevant buyers for their products, who are in-market and with the greatest purchasing intent. At the heart of the Informa Tech Digital Businesses’ growth is a portfolio of specialist brands delivering highly relevant and engaging business content to B2B audiences. Omdia, Industry Dive, NetLine, Canalys and Wards are the foundation of the Informa Tech Digital Businesses, alongside their portfolio of specialist digital media brands. These products inform, educate and influence tech buyers, creating engaged, specialist audiences and delivering approximately 5 million permissioned first party data records. Targeted access to these specialist audiences is provided through a growing range of data-driven digital products and services that are designed to deliver highly qualified leads, demand generation and buyer intent to technology vendors, connecting them with the right buyers at the right time to maximize ROI and accelerate growth. In addition, through its specialist tech research business, the Informa Tech Digital Businesses employ more than 300 expert analysts to create data-driven intelligence products and advisory services for product managers, corporate strategists and the C-suite, challenging market strategies, sharpening product roadmaps and accelerating time to market and revenue. 3. Related Party Transactions As of September 30, 2024 and January 4, 2024, a stockholder receivable of $ 1 was due from TechTarget. 4. Commitments and Contingencies Following the announcement of the execution of the Merger Agreement, two lawsuits have been filed in the Supreme Court of the State of New York by purported stockholders of the Company, each naming the Company and the members of its board of directors as defendants (the “Complaints”). The first action is captioned Catherine Coffman v. TechTarget, Inc. et al., 655891/2024, and was filed on November 7, 2024 . The second action is captioned Susan Finger v. TechTarget, Inc. et al., 655885/2024, and was also filed on November 7, 2024 . The Complaints claim that the Definitive Proxy Statement is materially incomplete and misleading in violation of New York common law. In particular, the Complaints generally allege that the Definitive Proxy Statement contains materially misleading and incomplete information concerning, among other things: (i) the Company’s, Informa Tech’s, and the pro forma company’s financial projections; (ii) the data and inputs underlying the financial analyses of the Company’s financial advisor, J.P. Morgan Securities LLC (“J.P. Morgan”); and (iii) potential conflicts of interest between Company insiders and BrightTower Securities, LLC (“BrightTower”). The Complaints also seek to enjoin the transaction, rescind the transaction should it be consummated or an award of damages if the transaction is consummated, and an award of fees and expenses. The Company has also received correspondence from law firms claiming to represent purported stockholders, who have threatened litigation and/or made other demands relating to the Merger, including that additional disclosures be provided (the “Litigation Matters”). The Company cannot predict whether any of such demands or threats will result in litigation, whether additional demands or litigation may materialize, or the outcome of any such litigation relating to the Merger. If additional similar complaints are filed or additional demands are received, absent new or materially different allegations, the Company will not necessarily disclose them. The Company and other named defendants in the Complaints deny that they have violated any laws or breached any duties to the Company’s stockholders, and the Company denies all allegations in the Litigation Matters. The Company believes that no supplemental disclosure to the Definitive Proxy Statement was or is required under any applicable law, rule or regulation. However, solely to eliminate the burden and expense of litigation, to moot the plaintiff’s disclosure claims, and to avoid potential delay or disruption to the Merger, the Company has determined to voluntarily supplement the Definitive Proxy Statement. The Company believes that the disclosures set forth in the Definitive Proxy Statement comply fully with applicable law, and nothing shall otherwise be deemed an admission of the legal necessity or materiality under applicable law of any of the disclosures set forth herein. 5. Summary of Significant Accounting Policies The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted (Generally Accepted Accounting Principles or “U.S. GAAP”) in the United States (“U.S.”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. All adjustments, which, in the opinion of management, are considered necessary for a fair presentation of the results of operations for the periods shown, are of a normal, recurring nature and have been reflected in the condensed consolidated financial statements. The results of operations for the periods presented are not necessarily indicative of results to be expected for any other interim periods or for the full year. Events subsequent to September 30, 2024, including any completion of the Transactions, are not reflected in the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. 7