Jan 15, 2024 | e-invoicing

Thomson Reuters Corporation (NYSE / TSX: TRI) (“Thomson Reuters”) a global content and technology company, has today announced the acquisition of approximately 53.81 per cent of the shares in Pagero Group AB (publ) (Nasdaq First North Growth Market: PAGERO) (“Pagero” or the “Company”) from key shareholders, including Summa Equity, Pagero’s CEO Bengt Nilsson, as well as several members of the management team and employees, making Thomson Reuters the majority shareholder in Pagero.

On January 11, 2024 Thomson Reuters announced a recommended public tender offer to acquire 100 per cent of the shares of Pagero (the “Offer”). Today Thomson Reuters increases the price in the Offer to SEK 50 per share and declares the Offer unconditional (the “Revised Offer”). The independent bid committee of Pagero’s board of directors unanimously recommends all shareholders of Pagero accept the Revised Offer.

Pagero is a global leader in e-invoicing and indirect tax solutions, which it delivers through its Smart Business Network. The Company links customers, suppliers, and institutions, allowing for the automated, compliant, and secure exchange of digital orders, invoices, and other business documents.

Thomson Reuters’ majority ownership of Pagero will enhance the strategic partnership announced in February 2023, accelerating the companies’ joint vision for a connected suite of global indirect tax, reporting and e-invoicing capabilities.

As many countries move towards legislating for real-time digital tax regulation, the e-invoicing compliance capabilities of Pagero complement and expand Thomson Reuters’ ONESOURCE indirect tax offerings, providing enhanced compliance and workflow automation benefits to customers.

To ensure continuity for its community of Indirect Tax customers, Thomson Reuters is committed to maintaining Pagero as a market solution.

“Since the announcement of our initial offer for Pagero on 11 January, following constructive discussions with Bengt Nilsson, Summa Equity and other key shareholders of Pagero, we are pleased to have reached an agreement for them to sell their shares to Thomson Reuters – making us the majority shareholder in Pagero at 53.81 per cent. This validates Thomson Reuters as the best home for Pagero and supports our shared vision to provide customers with automated, secure, and compliant tax solutions.” Said Steve Hasker, CEO and President, Thomson Reuters.

“Against this background, we are confident in our revised and unconditional offer of SEK 50 per share to all remaining shareholders of Pagero, representing an increase of 25 per cent compared to our initial offer. We believe our revised offer is highly compelling for Pagero’s shareholders, confirmed by the unanimous recommendation from the independent bid committee. We look forward to closing out our offer and working together with the talented team at Pagero.”

Benefits of the proposed acquisition

• Significant e-invoicing growth opportunity – More than 80 countries have announced or introduced legal requirements for e-invoicing and continuous transaction control (CTC) regulations with the aim of ensuring tax compliance and increased transparency. The resulting compliance burden on global companies is significant and is expected to drive continued robust growth for e-invoicing solutions like Pagero’s for many years into the future.
• Pagero provides market leading solutions – Pagero offers a comprehensive suite of global e-invoicing and digital communications solutions through a single, modern and open technology platform. The Company’s Smart Business Network links its 90,000 customers with over 14 million connected companies, providing emerging “network” effects as it continues to scale.
• Compelling strategic fit – The combination of Pagero’s e-invoicing compliance capabilities with the indirect tax determination and reporting from Thomson Reuters’ ONESOURCE should yield significant benefits for customers, including enhanced compliance capabilities, workflow automation, and global scale through a single trusted vendor. Over time, Thomson Reuters sees opportunities to leverage Pagero’s open communications network to deliver additional compliance offerings, including for global trade management and supply chain/vendor risk.
• Attractive financial model – Pagero has a high-quality revenue mix (87 per cent recurring) and proven track record of double-digit revenue growth. It is highly profitable in scaled markets and believes it has a pathway to robust overall profitability in the next few years as its investment markets scale.

The Revised Offer

The total value of the Revised Offer, based on all outstanding 161,167,486 outstanding shares in Pagero, amounts to approximately SEK 8.1 billion.

The revised Offer represents a premium of 11.1 per cent compared to the public cash offer of SEK 45 from Avalara[1] which was announced on 12 January, 2024, and 145.9 per cent compared to the volume-weighted average price of Pagero’s shares on Nasdaq First North during the 30 latest trading days prior to the announcement of Vertex’s offer on 13 December, 2023, and 174.9 per cent compared to the volume-weighted average trading price for Pagero’s shares on Nasdaq First North Growth Market during the 90 latest trading days prior to the announcement of Vertex’s[2] offer on 13 December, 2023.

Waiving of the Offer’s conditions

Thomson Reuters has declared the Offer unconditional, meaning that the conditions for completion of the Offer, as set out in the Offer Document in the section ”Conditions for completion of the Offer”, have ceased to apply to the Offer. Thomson Reuters will complete the Offer, all shares tendered in the Offer will be settled once the Offer’s acceptance period expires.

[1] “Avalara” refers to Avalara, Inc., acting through Loki BidCo AB; a Swedish private limited liability company with registration number 559430-7448.

[2] “Vertex” refers to Vertex, Inc., acting through its wholly-owned subsidiary Goldcup 34190 AB; a Swedish private limited liability company with registration number 559457-8444.

Timetable
The acceptance period for the Offer expires on 9 February 2024 17:00 CET. Settlement for all shares tendered in the Offer is expected to be initiated on or around 16 February 2024. Thomson Reuters reserves the right to postpone the settlement date, however, that settlement shall in any event be made within 7 business days following the expiration of the acceptance period. Thomson Reuters will announce any postponement of the settlement date by a press release in accordance with applicable laws and regulations.

Thomson Reuters shareholding in Pagero
As of the date of this announcement, Thomson Reuters holds and controls 86,720,670 shares and votes in Pagero, corresponding to approximately 53.81 per cent of shares and votes in Pagero.

This press release shall not constitute an offer to buy or a solicitation of an offer to sell any Pagero securities. The Offer will be made solely pursuant to the applicable offer document, when available. The Offer is not being made to holders of securities in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. The full details of the Offer, including complete instructions on how to tender Pagero shares, will be included in the offer document.

Financing of the Offer
The Offer is not subject to any financing contingency. The consideration payable in respect of the Offer is fully financed through funds currently available to Thomson Reuters.

Advisors
Thomson Reuters has engaged Morgan Stanley & Co. LLC as financial adviser and Linklaters as legal adviser in connection with the Offer.

Investor contact
Gary E. Bisbee, CFA
Head of Investor Relations
+1 646 540 3249
gary.bisbee@thomsonreuters.com

For more information about the Offer, please see: https://www.business-network-offer.com/