Initial Public Offering (IPO)

6 Months Ended

Jun. 30, 2020

On July 6, 2020, we completed an IPO of 90,047,612 shares of our common stock, par value $0.0001 per share at an offering price of $22.00 per share. Immediately subsequent to the closing of the IPO, a subsidiary of Cannae Holdings, a subsidiary of Black Knight and affiliates of CC Capital purchased a total of 18,458,700 shares of common stock from us in a private placement at a price per share equal to 98.5% of the IPO price for proceeds of $200.0 million, $100.0 million and $100.0 million, respectively. A total of 108,506,312 shares of common stock were issued in the IPO and concurrent private placement for gross proceeds of $2,381.0 million. The use of the proceeds from the IPO is as follows (in millions):


Gross proceeds	$	2,381.0
Less:
Underwriter fees	89.1
IPO related expenses (a)	42.3
Redemption of Series A Preferred Stock	1,067.9
Make-whole payment on redemption of
Series A Preferred Stock	205.2
Partial redemption of 10.250% New Senior
Unsecured Notes and accrued interest	312.0
Call premium on partial redemption
of 10.250% New Senior Unsecured Notes	30.8
Cash to balance sheet	$	633.7

(a) Includes payment of $30.0 million to the Originating Sponsors, in connection with the waiver and termination of anti-dilution rights in the Star Parent Partnership Agreement. Also in connection with the IPO transaction, we paid fees of $2.5 million each to THL Managers and entities affiliated with William P. Foley II and Chinh E. Chu (Bilcar and CC Star Holdings, LP, respectively) for services provided.

In connection with the IPO, the following transactions occurred:

•On June 23, 2020, we increased our authorized common stock to 2,000,000,000 and our authorized preferred stock to 25,000,000 and effected a 314,494.968 for 1 stock split of our common stock. All of the common share and per share

information in the consolidated financial statements for the Successor periods have been retroactively adjusted to reflect the increase in authorized common stock and stock split;

•In connection with the closing of the IPO and the concurrent private placement on July 6, 2020, all outstanding equity incentive awards in the form of profits interests were converted into common units of Star Parent, L.P. which retain the original time-based vesting schedule and are subject to the same forfeiture terms applicable to such unvested units.

In connection with the IPO, we adopted the Dun & Bradstreet 2020 Omnibus Incentive Plan (the ‘‘2020 Omnibus Incentive Plan’’). The 2020 Omnibus Incentive Plan is intended to provide flexibility to motivate, attract and retain the employees, directors, and service providers who are expected to make significant contributions to our success and allow participants to share in such success. On June 30, 2020, certain directors were granted 4,160,000 options to purchase shares of common stock of Dun & Bradstreet Holdings, Inc. at $22.00 per share, which were vested immediately. In addition, 3,840,000 stock options were granted to certain executives which will vest ratably over three years, commencing on the first anniversary of the grant date. All stock options expire seven years from the date of the grant. Total compensation expense associated with these grants is $39.9 million. We estimated the option fair value at the date of grant using Black-Scholes valuation model. The assumptions are set forth in the following table:


Weighted Average Assumptions
Weighted Average Expected Stock Price Volatility	28	%
Weighted Average Expected Dividend Yield	0.0	%
Weighted Average Expected Life of Option (in years)	3.98
Weighted Average Risk-Free Interest Rate	0.23	%
Weighted Average Black Scholes Value	$4.99
Weighted Average Exercise Price	$22.00

Expected stock price volatility was derived from the historical volatility of companies in our peer group. The risk-free interest rate assumption corresponds to the time to liquidity assumption and is based on the U.S. Treasury yield curve in effect at the time.

We recognized stock-based compensation expense of $20.0 million related to these option grants for the three and six months ended June 30, 2020. In addition, we recognized $3.4 million in connection with the acceleration of the vesting of certain directors' profit interest units upon the closing of the IPO on July 6, 2020.