Statement by the independent bid committee of Pagero in relation to the public offer from Vertex

Background

This statement is made by the independent bid committee¹ (the “Bid Committee”) of the Board of Directors of Pagero Group AB (publ) ("Pagero" or the "Company") pursuant to section II.19 of the Takeover rules for certain trading platforms (the "Takeover Rules").

Vertex Inc., through the wholly-owned subsidiary Goldcup 34190 AB ("Vertex") has today, through a press release, announced a public offer to the shareholders of Pagero to acquire all outstanding shares in Pagero (the "Offer"). Vertex offers the shareholders in Pagero a cash consideration of SEK 36 for each share in Pagero (the "Offer Price").

The total value of the Offer, based on all outstanding 161,167,486 shares in Pagero, amounts to approximately SEK 5.8 billion and the Offer Price represents a premium of:

• 71.4 per cent compared to the closing price of the Pagero share on Nasdaq First North Growth Market on 12 December 2023 (which was the last trading day prior to the announcement of the Offer) of SEK 21.0,
• 77.1 per cent compared to the volume-weighted average price of the Pagero share on Nasdaq First North Growth Market during the latest 30 trading days up to and including 12 December 2023 of SEK 20.3, and
• 97.9 per cent compared to the volume-weighted average price of the Pagero share on Nasdaq First North Growth Market during the latest 90 trading days up to and including 12 December 2023 of SEK 18.2.

Vertex has stated that it will neither increase the Offer Price nor purchase any Pagero shares at a price exceeding the Offer Price during the Offer or following the completion of the Offer, provided, however, that this statement shall not apply if a competing offer is announced.

The acceptance period of the Offer is expected to commence on or around 15 December 2023 and end on or around 23 January 2024.

Completion of the Offer is conditional upon, inter alia, the Offer being accepted to the extent that Vertex becomes the owner of more than 90 per cent of the shares in Pagero (on a fully diluted basis) and that, with respect to the Offer and the acquisition of Pagero, all necessary regulatory, governmental or similar clearances, approvals and decisions, including approvals from competition authorities, have been obtained, in each case on terms which, in Vertex’s opinion, are acceptable. Vertex has reserved the right to fully or partially waive these conditions and other conditions for completion of the Offer.

The Bid Committee has, upon written request by Vertex, allowed Vertex to conduct a limited due diligence review of Pagero in connection with the preparations for the Offer. In connection with this review, Vertex has met with Pagero's management. Vertex has not received any inside information from Pagero in connection with its due diligence review.

For further information regarding the Offer, please refer to the press release announced by Vertex today and the offer document in respect of the Offer, which will be published before the acceptance period commences.

The Bid Committee has retained Lazard as financial advisor and Cederquist as legal advisor in connection with the Offer. The Bid Committee has also obtained a fairness opinion regarding the Offer from EY. The fairness opinion is attached to this statement.
 

The Bid Committee’s recommendation

Board members Bengt Nilsson, Birger Steen and Christian Melby have, due to undertakings to accept the Offer which cause a conflict of interest, not participated and will not participate in the board of directors’ handling of, or decisions on, matters related to the Offer. Instead, an independent bid committee has been formed, consisting of the four remaining board members Fredrik vom Hofe, Karin Sandsjö, Mats Ryding and Marianne K. Knudsen. Fredrik vom Hofe is the chairman of the Bid Committee.

In evaluating the Offer, the Bid Committee has considered a number of factors which the committee considers relevant. These factors include, but are not limited to, Pagero’s current strategic and financial position, the Company’s share price development since IPO, prevailing market conditions and operational opportunities and challenges, the Company’s expected future development and opportunities and risks related thereto. The Bid Committee has considered valuation methods normally used to evaluate public offers for listed companies, including how the Offer values Pagero in relation to comparable listed companies and comparable transactions, bid premiums in previous public takeover offers, the stock market’s expectations regarding the Company and the Bid Committee’s view of the Company’s value based on its expected future cash flows.

The Bid Committee has full confidence in management’s ability to execute on Pagero’s current strategy and to deliver on the Company’s financial targets and acknowledges the Company’s achievements to date, but also recognizes that there are risks related thereto. With a new strategic owner, the Company can benefit from being part of an enlarged group, to accelerate the Company’s scale-up.

The Bid Committee notes that the Offer represents a premium of approximately 71.4 per cent compared to the closing price of the Pagero share on 12 December 2023 (which was the last trading day prior to the announcement of the Offer), a premium of approximately 77.1 per cent compared to the volume-weighted average price of the Pagero share during the latest 30 trading days prior to the announcement of the Offer, and a premium of approximately 97.9 per cent compared to the volume-weighted average price of the Pagero share during the latest 90 trading days prior to the announcement of the Offer. The Bid Committee also notes that the price per share in the Offer represents a premium of 50.0 per cent in relation to the IPO price of SEK 24 for the Pagero share on Nasdaq First North Growth Market on 22 October 2021.

Following the IPO in 2021, there have been takeover discussions with other strategic and financial acquirors, and the Bid Committee notes that the Board of Directors has declined offers substantially below the price of SEK 36 per share in the Offer.

The Bid Committee has also considered that the Company’s largest shareholder Summa Equity² as well as its second largest shareholder and CEO Bengt Nilsson³, that in total hold approximately 40.4 per cent of the outstanding shares and votes in Pagero, have irrevocably undertaken to accept the Offer under certain conditions⁴.

The fairness opinion provided by EY at the request of the Bid Committee states that the Offer, as of the date of the opinion, from a financial point of view is fair to Pagero’s shareholders, based on, and under the conditions stated in the fairness opinion. EY’s fee for the engagement is fixed and does not depend on the size of the Offer Price or to what extent the Offer will be accepted or whether or not the Offer is completed.

The Bid Committee considers the terms of the Offer at such levels that the overall assessment is that the consideration in the Offer will adequately compensate the Company’s shareholders, also taking into account the time it takes to implement the Company’s business plan, and thereto related risks. The Bid Committee also notes that from a financial point of view the Offer is fair as expressed in EY’s fairness opinion.

On this basis, the Bid Committee unanimously recommends the shareholders of Pagero to accept the Offer.
 

Impact on Pagero and its employees

Under the Takeover Rules, the Bid Committee shall, based on the statements made by Vertex in its announcement of the Offer, present its opinion regarding the impact that the implementation of the Offer may have on Pagero, particularly in terms of employment, and its opinion regarding Vertex's strategic plans for Pagero and the effects it is anticipated that such plans will have on employment and on the places in which Pagero conducts its business. In its offer announcement, Vertex has stated the following in respect of the employees and management of Pagero:

“Vertex recognizes that the employees and executive team of Pagero have built an exceptionally successful business with a strong track record. The partnering efforts to date have been essential in gauging the cultural compatibility between both organizations and have forged strong connections across multiple teams, which will prove beneficial as the two companies collaborate on integration. Vertex currently does not plan to carry out any significant changes affecting Pagero's employees and management or the locations in which Pagero operates.”

The Bid Committee assumes that this description is accurate and has in relevant aspects no reason to take a different view.

This statement shall in all respects be governed by and construed in accordance with Swedish law. Disputes arising from this statement shall be settled exclusively by Swedish courts.
 

Gothenburg, 13 December 2023

Pagero Group AB (publ)

The Bid Committee

For more information, please contact:

Fredrik vom Hofe, Deputy chairman of the board of directors and chairman of the Bid Committee

Oscar Wegland, Chief Marketing Officer, +46733620060, [email protected]
 

This information is information that Pagero Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation 596/2014. The information was submitted for publication, through the agency of the contact persons set out above, at 07.15 CET on 13 December 2023.

This statement has been made in a Swedish and English version. In case of any discrepancies between the Swedish and the English version, the Swedish version shall prevail.

About Pagero

Pagero provides a Smart Business Network that connects buyers and sellers for automated, compliant, and secure exchange of orders, invoices, payment instructions and other business documents. With an open network and a wide range of value-added apps, Pagero helps businesses streamline their order-to-cash and purchase-to-pay processes while unlocking the full potential of accurate and reliable business data. All of this, regardless of location, industry, size or systems.

Pagero’s share is traded on Nasdaq First North Growth Market under ticker PAGERO and ISIN SE0016830517.

Carnegie Investment Bank AB (publ) is Certified Adviser.

Find out more on www.pagero.com.

¹ Summa Equity has undertaken towards Vertex to accept the Offer in relation to all shares Summa Equity holds (indirectly via Vålåuggen Invest AB) in Pagero and Pagero’s board members Birger Steen and Christian Melby each has close connections with Summa Equity. Pagero’s CEO and board member Bengt Nilsson has also undertaken towards Vertex to accept the Offer in relation to all shares he holds (indirectly via Greenfield AB and Norelia AB) in Pagero. Taking into account the contractual relationship between Vertex and Bengt Nilsson and Summa Equity respectively and the Takeover Rules, neither Bengt Nilsson, Birger Steen nor Christian Melby have participated, or will participate, in Pagero’s board of director’s handling of or decisions in matters related to the Offer.

² Through Vålåuggen Invest AB.

³Through Greenfield AB and Norelia AB.

⁴ The undertakings are conditional on no other party announcing a competing offer not later than six business days prior to the expiry of the acceptance period in the Offer (or, in the event of any extensions thereof, not later than six business days prior to the expiry of any such extended acceptance period), at a price per share exceeding the Offer Price and Vertex does not within five business days of the announcement of such competing offer announce an increase of the Offer so that the increased offer price per share under the Offer matches or exceeds the offer price per share under such competing offer.