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A consortium comprising Accel-KKR, Long Path and Briarwood announces a recommended public tender offer through Sapphire BidCo Ltd for all shares in Basware Corporation

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Basware Corporation, inside information, 14 April 2022 at 8:35 a.m. EEST

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND OR SOUTH AFRICA OR IN ANY OTHER JURISDICTION IN WHICH THE TENDER OFFER WOULD BE PROHIBITED BY APPLICABLE LAW.

BASWARE CORPORATION (“Basware” or the “Company”), the global provider of Cloud-based Networked Procure-to-Pay solutions to help customers simplify operations and spend smarter by automating procurement and finance processes has entered into a combination agreement with Sapphire BidCo Ltd (“Sapphire” or the “Offeror”) regarding a voluntary recommended public cash tender offer (the “Tender Offer”) for all the issued and outstanding shares in Basware that are not held by Basware or its subsidiaries. The cash consideration of EUR 40.10 per share represents a total equity value of approximately 619.91 million (including the Warrants, as defined below). The share offer price represents a premium of approximately 94.7 per cent compared to the closing price of the shares on Nasdaq Helsinki Ltd (“Nasdaq Helsinki”) on 13 April 2022, the last trading day immediately preceding the announcement of the Tender Offer.

Following the completion of the Tender Offer, Basware will be indirectly wholly-owned by a consortium of investors comprising Accel-KKR Capital Partners VI, LP (“Accel-KKR”), Long Path Holdings 1, LP (a vehicle controlled by funds managed or advised by Long Path Partners, LP, and/or its affiliates, together “Long Path”), and Briarwood Capital Partners LP (a vehicle controlled by Briarwood Chase Management LLC, and/or its affiliates, together “Briarwood”) (each a “Consortium Member” and together, the “Consortium”) through Sapphire, a newly-formed private limited liability company established for the purposes of the Tender Offer and incorporated and existing under the laws of Finland.

The Board of Directors of Basware has unanimously decided to recommend that the shareholders and warrantholders of Basware accept the Tender Offer.

Long Path and Briarwood have irrevocably undertaken to exchange Basware shares held by them for securities in the Offeror’s affiliated entity, Topaz MidCo Ltd (“Topaz”), upon the completion of the Tender Offer having been confirmed and certain other major shareholders have irrevocably undertaken to accept the Tender Offer subject to certain customary conditions. In aggregate, these undertakings represent, on a fully diluted basis, 56.27 per cent of the shares and votes in Basware.

“The offer from the consortium represents a good value extraction for Basware’s shareholders and offers a significant premium over both the market price and the historical share levels. We are pleased that the hard work from management and employees in building a world class scalable software-as a-service offering, is recognized and the company is now ready for the next step of the journey. The consortium offers the company valuable insight and capital to further strengthen Basware’s position as a Networked Procure-to-Pay solutions and services provider as well as gain more market share globally in an increasingly competitive sector. Under private ownership, Basware’s management will be able to devote their full attention to executing business performance and achieving results,” said Michael Ingelög, Chair of the Board of Directors of Basware.

“I see this offer as clear evidence of all the good work that the employees of Basware have done over the past years, and the opportunities we have ahead of us. The consortium members have been following our company for years already and value all aspects of the business from the market leading SaaS products and services to the large global customer base as well as the strength of our highly skilled and motivated employees. This signals strong confidence in our people and our strategy of “Sustainable Growth and Profitability”. With the support and resources of the consortium members we will have even better opportunities to accelerate our journey and value creation for all stakeholders,” said Klaus Andersen, Chief Executive Officer of Basware.

“Basware’s deep set of solutions and market leadership combined with the consortium members’ long history with the company and deep know-how in accelerating growth in software companies will position the business to continue to deliver innovative solutions to its customers and the broader marketplace. We look forward to working closely with the Basware team in the coming years,” said Dean Jacobson, Managing Director of Accel-KKR, on behalf of the consortium.

Key highlights and summary of the Tender Offer

  • On 14 April 2022, the Offeror and Basware entered into a combination agreement (the “Combination Agreement”) pursuant to which the Offeror will make the Tender Offer for all of the issued and outstanding shares in Basware (the “Shares” or, individually, a “Share”) that are not held by Basware or any of its subsidiaries. Accel-KKR, Long Path and Briarwood form the Consortium for the purposes of the Tender Offer, which indirectly owns the Offeror.
  • The Tender Offer is also made for the warrants issued by the Company based upon a decision by the Board of Directors of the Company on 19 March 2019, by virtue of the authorization by the General Meeting of Shareholders of the Company on 15 March 2018 (the “Warrants”).
  • The Consortium currently holds in the aggregate, on a fully diluted basis, approximately 23.06 per cent of the shares and votes in Basware (Long Path holds 1,882,818 Shares and Briarwood holds 680,948 Shares and 1,000 Warrants).
  • The share offer price under the Tender Offer is EUR 40.10 in cash for each Share validly tendered in the Tender Offer (the “Share Offer Price”), subject to any adjustments as set out in section “The Tender Offer in Brief” below.
  • The Share Offer Price represents a premium of approximately 94.7 per cent compared to the closing price (EUR 20.60) of the Share on Nasdaq Helsinki on 13 April 2022, the last trading day immediately preceding the announcement of the Tender Offer; approximately 72.9 per cent compared to the volume-weighted average trading price (EUR 23.20) of the Share on Nasdaq Helsinki during the three-month period prior to and up to the date of the announcement of the Tender Offer; and approximately 26.5 per cent compared to the volume-weighted average trading price (EUR 31.69) of the Share on Nasdaq Helsinki during the 12-month period prior to and up to the date of the announcement of the Tender Offer.
  • The Tender Offer values Basware’s total equity (including the Warrants) at approximately EUR 619.91 million.
  • The Consortium believes that it can enhance Basware’s leadership position in the Procure-to-Pay market through additional investments in products as well as by focusing on the expansion of its global footprint. The Consortium intends to invest significant time, capital and other resources to support the Company’s strategy, positioning it for long-term success. The Consortium is uniquely equipped with the appropriate long-term investment horizon, expertise, and capital required to realize Basware’s potential while maintaining the Company’s identity, culture, and Finnish values.
  • Long Path and Briarwood have irrevocably undertaken to exchange Shares held by them for securities in Topaz, upon the completion of the Tender Offer having been confirmed. In addition, the Warrants are held by Briarwood which has irrevocably undertaken to either exercise the Warrants upon the completion of the Tender Offer having been confirmed and to then exchange Shares so subscribed for securities in Topaz, or to exchange the Warrants for securities in Topaz.
  • Certain major shareholders and founders of Basware, i.e. Ilkka Sihvo, Hannu Vaajoensuu, Kirsi Eräkangas, Sakari Perttunen, and Antti Pöllänen and their certain family members, together representing, on a fully diluted basis, approximately 18.45 per cent of all the shares and votes in Basware, have irrevocably undertaken to accept the Tender Offer subject to certain customary conditions. In addition, Lannebo Fonder AB, Fjärde AP-fonden and Ilmarinen Mutual Pension Insurance Company, together representing, on a fully diluted basis, approximately 14.76 per cent of all the shares and votes in Basware, have irrevocably undertaken to accept the Tender Offer subject to certain customary conditions. Together with the undertakings by Long Path and Briarwood, the Offeror has received irrevocable undertakings representing in total, on a fully diluted basis, 56.27 per cent of the shares and votes in Basware.
  • The Offeror has secured commitments for the required equity and debt financing to finance the Tender Offer at completion in accordance with its terms, and compulsory redemption proceedings, if any, in accordance with the Finnish Companies Act (624/2006, as amended, the “Finnish Companies Act”).
  • The Offeror expects to publish a tender offer document (the “Tender Offer Document”) with detailed information on the Tender Offer on or about 25 April 2022. The offer period under the Tender Offer is expected to commence on or about 26 April 2022, and to expire on or about 7 June 2022, unless the Offeror extends the offer period in order to satisfy the Conditions to Completion (as defined below), including, among others, receipt of the Authority Approvals (as defined below). The Tender Offer is currently expected to be completed during July 2022.
  • The completion of the Tender Offer is subject to the satisfaction or waiver by the Offeror of certain customary conditions on or prior to the Offeror’s announcement of the final results of the Tender Offer including, among others, that approvals by the competition authorities and other regulatory authorities have been received and the Offeror having gained control of more than 90 per cent of the Shares and votes in Basware on a fully diluted basis.

About the Consortium

The Offeror is directly wholly-owned by Topaz, which is a private limited liability company incorporated under the laws of Finland. Topaz is in turn directly wholly-owned by Gemstone Holding LP (“Gemstone”), which is a limited partnership formed under the laws of Delaware, United States and which was incorporated to be the holding company in the acquisition structure and is directly wholly-owned by Accel-KKR, Long Path and Briarwood.

Accel-KKR is affiliated with AKKR Fund II Management Company, LP, a registered investment adviser under the regulatory oversight of the United States Securities and Exchange Commission (“SEC”). The company was founded in 2000 and today comprises a team of over 80 investment, operational and consulting professionals. The company specialises in partnering with mid-sized software and tech-enabled services companies and working with founders to increase underlying business value over the long-term. Since its inception, the company has acquired or invested in over 300 businesses across the globe. AKKR Fund II Management Company, LP has over USD 13 billion in cumulative capital commitments raised across its buyout, growth capital, and credit funds with capital commitments with a diverse group of investors, including hospitals and foundations, government pensions, university endowments, corporate pensions and insurance, and fund of funds.

Long Path is a registered investment adviser under the regulatory oversight of the SEC. Long Path was founded in 2018 and it has approximately USD 700 million assets under management (AUM). The company invests in a limited number of high quality, predictable businesses operating primarily in the enterprise software and business & information service markets. Long Path’s patient and flexible capital base allows for partnering with management teams to execute long-duration investments in both the public and private markets on a global basis. The client base of the company includes endowments and foundations, single- and multi-family offices, Outsourced Chief Investment Officers (OCIO’s) and high net worth individuals. Long Path has been a shareholder of Basware since 2019 and it currently holds approximately 13.02 per cent of all the shares and votes (and 12.17 per cent of all the shares and votes on a fully diluted basis) in Basware.

Briarwood is a registered investment adviser based in New York, United States and under the regulatory oversight of the SEC. The company employs a research-driven, value-oriented investment style focused on international equities. Briarwood is a long-term oriented owner, which seeks to form partnerships with management teams for an extended duration and to work collaboratively on areas where Briarwood can bring expertise such as capital markets. Briarwood’s client base mirrors the firm’s long-term investment style and consists of capital from global family offices, endowments, and foundations. Briarwood has been a shareholder of Basware since 2019 and currently holds approximately 4.71 per cent of all the shares and votes in Basware. In addition, Briarwood holds 1,000 warrants entitling it to subscribe for a total maximum number of 1,003,000 new shares in Basware, which it has irrevocably undertaken to exercise upon the completion of the Tender Offer having been confirmed and to then exchange Shares so subscribed for securities in Topaz, or to exchange the Warrants for securities in Topaz.

About Basware

Basware is a public limited liability company incorporated under the laws of Finland with its shares admitted to trading on the official list of Nasdaq Helsinki. Basware is a leading provider of cloud-based, software-as-a-service (SaaS) business solutions. The Company creates and delivers cloud-based Networked Procure-to-Pay solutions to help customers simplify operations and spend smarter by automating their procurement and finance processes. Basware serves globally operating enterprises and their suppliers across all industries and has over 6,500 customers in approximately 60 countries worldwide. Basware is a supplier of Networked Procure-to-Pay solutions and electronic invoicing services for both suppliers and buyers with an extensive global electronic invoicing network with users in over 180 countries. The Company’s technology enables the capture of all financial data across procurement, finance, accounts payable and accounts receivable functions. In addition, Basware’s offering comprises services related to electronic procurement, accounts payable automation, analytics as well as professional services.

Background and Strategic Rationale

The Consortium believes that under private ownership Basware will be best placed to fulfil its long-term potential by leveraging its technology and market leading position. The Consortium recognizes that the sector is becoming increasingly competitive and, as such, the Consortium intends to invest significant time, capital and other resources to support the Company’s strategy positioning it for long-term success. Under private ownership, the Company would be better positioned to invest further and faster in initiatives to support organic growth as well as to allocate additional capital for acquisitions to strengthen selected areas of the product. The Consortium believes that in a private setting, Basware will manage all the abovementioned initiatives more effectively as well as manage current market challenges enabling management to devote their full attention to business performance without the constraints imposed by the public market.

The Consortium is well-positioned to support the transformation of the Company due to Accel-KKR’s considerable experience in the procurement and payments software sectors and its specialized approach to working with software businesses. Accel-KKR has a long history of partnering with management in the pursuit of long-term strategic goals including both organic growth and growth through acquisitions. The Company will also benefit from the continuity of Long Path and Briarwood, which, as long-standing and significant investors in Basware, have an in-depth understanding of the opportunities and challenges the business faces as well as an existing relationship with the management team that will help facilitate the Company’s transformation. Together this group of investors is uniquely equipped with the appropriate long-term investment horizon, expertise, and capital required to realize Basware’s potential while maintaining the Company’s identity, culture, and Finnish values.

The Tender Offer is not expected to have any immediate material effects on the Company’s operations, assets, the position of the Company’s management or employees, or its business locations. However, as is customary in connection with public tender offers, the Offeror intends to change the composition of the Board of Directors of Basware after the completion of the Tender Offer.

The Tender Offer in Brief

The Offeror and Basware have on 14 April 2022 entered into a Combination Agreement pursuant to which the Offeror will make the Tender Offer. A brief summary of the Combination Agreement has been provided below under section “The Combination Agreement”.

The Offeror and Basware have undertaken to comply with the Helsinki Takeover Code issued by the Finnish Securities Market Association (the “Helsinki Takeover Code”).

As at the date of this announcement, Basware has 14,463,936 issued shares, of which 14,455,993 are outstanding Shares and 7,943 are held in treasury. As at the date of this announcement, Long Path directly holds 1,882,818 Shares, representing approximately 13.02 per cent of all the shares and votes in Basware and Briarwood directly holds 680,948 Shares, representing approximately 4.71 per cent of all the shares and votes in Basware. In addition, as at the date of this announcement, Briarwood holds 1,000 warrants entitling it to subscribe for a total maximum number of 1,003,000 new shares in Basware. As at the date of this announcement, neither the Offeror nor Accel-KKR hold any Shares. Briarwood has undertaken to either exercise the Warrants upon the completion of the Tender Offer having been confirmed and to then exchange Shares so subscribed for securities in Topaz, or to exchange the Warrants for securities in Topaz.

The Offeror reserves the right to acquire Shares during the offer period (including any extension thereof and any subsequent offer period) in public trading on Nasdaq Helsinki or otherwise.

The Offer Price

The Share Offer Price is EUR 40.10 in cash for each Share validly tendered in the Tender Offer and the offer price for each Warrant validly tendered in the Tender Offer is EUR 10,338.3222 in cash (“the Warrant Offer Price”), subject to any adjustments as set out below.

The Share Offer Price represents a premium of approximately:

  • 94.7 per cent compared to EUR 20.60, i.e. the closing price of the Share on Nasdaq Helsinki on 13 April 2022, the last trading day immediately preceding the announcement of the Tender Offer;
  • 72.9 per cent compared to EUR 23.20, i.e. the three-month volume-weighted average trading price of the Share on Nasdaq Helsinki immediately preceding the announcement of the Tender Offer; and
  • 26.5 per cent compared to EUR 31.69, i.e. the twelve-month volume-weighted average trading price of the Share on Nasdaq Helsinki immediately preceding the announcement of the Tender Offer.

The Share Offer Price has been determined based on 14,455,993 Shares and 1,000 Warrants. In the event that the number of Shares increases (with the exception of the aforementioned exercise of Warrants by Briarwood) or Basware issues special rights entitling to Shares in accordance with Chapter 10 of the Finnish Companies Act prior to the completion date of the Tender Offer, the Offeror will have the right to adjust the Share Offer Price accordingly on a euro-for-euro basis.

If a decision is made at a general meeting of shareholders of Basware or by the Board of Directors of Basware prior to the completion date of the Tender Offer to distribute dividends or other assets in accordance with Chapter 13, Section 1 of the Finnish Companies Act to which a holder of Shares who has accepted the Tender Offer is entitled, an amount equal to the dividend or distribution per Share will be deducted from the Share Offer Price on a euro-for-euro basis.

The Offer Period

The offer period under the Tender Offer is expected to commence on or about 26 April 2022, and to expire on or about 7 June 2022. The Offeror reserves the right to extend the offer period from time to time in accordance with, and subject to, the terms and conditions of the Tender Offer and applicable laws and regulations, in order to satisfy the conditions to completion of the Tender Offer, including, among others, the receipt of approvals from relevant competition authorities or other regulatory authorities as set out in the Combination Agreement (the “Authority Approvals”). The Tender Offer is currently expected to be completed during July 2022.

The detailed terms and conditions of the Tender Offer as well as instructions on how to accept the Tender Offer will be included in the Tender Offer Document, which the Offeror expects to publish on or about 25 April 2022 upon the FIN-FSA having approved the Tender Offer Document.

Recommendation by the Board of Directors of Basware

The Board of Directors of Basware has unanimously decided to recommend that the shareholders and warrant holders of Basware accept the Tender Offer. The Board of Directors will issue its statement on the Tender Offer in accordance with the Finnish Securities Markets Act (746/2012, as amended, the “Finnish Securities Markets Act”) before the commencement of the offer period. To support its assessment of the Tender Offer, the Board of Directors of Basware has received an opinion from Basware’s financial adviser Goldman Sachs International (“Goldman Sachs”) that, as of the date of the written fairness opinion and based upon and subject to the factors and assumptions set forth therein, the EUR 40.10 in cash per Share to be paid to the holders (other than the Consortium and their affiliates) of Shares pursuant to the Combination Agreement is fair from a financial point of view to the holders (other than the Consortium and their affiliates) of Shares.

The full text of the written opinion of Goldman Sachs, dated 14 April 2022, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, will be attached to the statement that will be issued by the Board of Directors of Basware. Goldman Sachs provided its opinion for the information and assistance of the Basware Board in connection with its consideration of the Tender Offer. The Goldman Sachs opinion is not a recommendation as to whether any holder of Shares should tender such Shares in connection with the Tender Offer or any other matter.

The statement of the Board of Directors in accordance with the Finnish Securities Markets Act regarding the Tender Offer will be published prior to the commencement of the offer period and appended to the Tender Offer Document.

Support by Certain Major Shareholders of Basware

Certain major shareholders and founders of Basware, i.e. Ilkka Sihvo, Hannu Vaajoensuu, Kirsi Eräkangas, Sakari Perttunen, and Antti Pöllänen and their certain family members, together representing, on a fully diluted basis, approximately 18.45 per cent of all the shares and votes in Basware, have irrevocably undertaken to accept the Tender Offer subject to certain customary conditions. In addition, Lannebo Fonder AB, Fjärde AP-fonden and Ilmarinen Mutual Pension Insurance Company, together representing, on a fully diluted basis, approximately 14.76 per cent of all the shares and votes in Basware, have irrevocably undertaken to accept the Tender Offer subject to certain customary conditions.

Long Path and Briarwood have irrevocably undertaken to exchange Shares held by them for securities in Topaz upon the completion of the Tender Offer having been confirmed. In addition, Briarwood has irrevocably undertaken to either exercise the Warrants upon the completion of the Tender Offer having been confirmed and to then exchange Shares so subscribed for securities in Topaz in connection with the Tender Offer, or to exchange the Warrants for securities in Topaz. Briarwood and Long Path together represent, on a fully diluted basis, approximately 23.06 per cent of all the shares and votes in Basware. The members of the Consortium have a right to terminate their participation in the Consortium in certain circumstances as specified in the agreements entered into among the members of the Consortium, in which case Long Path and Briarwood would have a right to withdraw their undertakings.

The irrevocable undertakings described above represent, on a fully diluted basis, approximately 56.27 per cent of all the shares and votes in Basware.

Conditions to Completion of the Tender Offer

A condition to the completion of the Tender Offer is that the requirements set forth below for the completion of the Tender Offer (the “Conditions to Completion”) are fulfilled on or by the date of the Offeror’s announcement of the final result of the Tender Offer in accordance with Chapter 11, Section 18 of the Finnish Securities Markets Act, or, to the extent permitted by applicable law, their fulfilment is waived by the Offeror.

    1. the Tender Offer has been validly accepted with respect to outstanding Shares representing, together with any Shares otherwise held by the Offeror or the Consortium Members and any Shares that may be received upon exercise of the Warrants by the Offeror or the Consortium Members, on a fully diluted basis, prior to the date of announcement of the final result of the Tender Offer more than ninety (90) per cent of the outstanding Shares and voting rights in the Company calculated in accordance with Chapter 18, Section 1 of the Finnish Companies Act governing the right and obligation to commence compulsory redemption proceedings;
    2. the receipt of all regulatory approvals, permits, consents, clearances or other actions required under any applicable competition laws or other regulatory laws in any jurisdiction for the completion of the Tender Offer by the Offeror (including the Authority Approvals and a potential approval in accordance with the Act on Monitoring of Foreign Corporate Acquisitions in Finland (172/2012, as amended) and any conditions set out in such approvals, permits, consents, clearances or other actions do not constitute a material adverse change or do not require Consortium Members to agree to any measures with respect to any portfolio companies of any Consortium Members or any of their respective affiliates;
    3. no legislation or other regulation having been issued or decision by a competent court or regulatory authority having been given that would wholly or in any material part prevent or postpone the completion of the Tender Offer;
    4. no fact or circumstance having arisen after the signing date of the Combination Agreement that constitutes a material adverse change;
    5. the Combination Agreement having not been terminated in accordance with its terms and remaining in full force and effect;
    6. the Board of Directors of the Company having issued its unanimous recommendation that the securityholders of the Company accept the Tender Offer and the recommendation remaining in full force and effect and not having been modified, cancelled or changed (excluding any technical modification or change of the recommendation required under applicable laws or the Helsinki Takeover Code as a result of a competing offer so long as the recommendation to accept the Tender Offer is upheld); and
    7. the irrevocable undertakings by Kirsi Eräkangas, Lotta Eräkangas, Meimi Perttunen, Sakari Perttunen, Antti Pöllänen, Ilkka Sihvo, Hannu Vaajoensuu and Vaens Oy, Matias Vaajoensuu, Petra Vaajoensuu, Sara Vaajoensuu Salmi, Fjärde AP-fonden, Ilmarinen Mutual Pension Insurance Company and Lannebo Fonder AB to accept the Tender Offer remaining in full force and effect in accordance with their terms and not having been modified, cancelled or changed.

The Conditions to Completion set out herein are exhaustive. The Offeror may only invoke any of the Conditions to Completion so as to cause the Tender Offer not to proceed, to lapse or to be withdrawn, if the circumstances which give rise to the right to invoke the relevant Condition to Completion have a significant meaning to the Offeror in view of the Tender Offer, as referred to in the regulations and guidelines (9/2013) of the FIN-FSA on Takeover Bids and Mandatory Bids, as may be amended or re-enacted from time to time (the “FIN-FSA Regulations and Guidelines”) and the Helsinki Takeover Code. The Offeror reserves the right to waive, to the extent permitted by applicable law and regulation, any of the Conditions to Completion that have not been fulfilled. If all Conditions to Completion have been fulfilled or waived by the Offeror no later than at the time of announcement of the final results of the Tender Offer, the Offeror will exercise its rights to draw the funding on its debt and equity commitment letters in accordance with the terms and conditions to thereof and consummate the Tender Offer in accordance with its terms and conditions after the expiration of the Offer Period by purchasing Shares and Warrants validly tendered in the Tender Offer and paying the Share Offer Price to the shareholders that have validly accepted the Tender Offer.

Authority Approvals

The Offeror will, as soon as reasonably practicable, make all material and customary submissions, notifications and filings (or draft notifications as appropriate) required to obtain the Authority Approvals.

Based on currently available information, the Offeror expects to obtain the Authority Approvals and to complete the Tender Offer during July 2022. The Offeror will use its reasonable best efforts to obtain the Authority Approvals subject to the Conditions to Completion. However, the length of the Authority Approvals process is not within the control of the Offeror, and there can be no assurances that clearance will be obtained within the estimated timeframe, or at all.

Financing

The Offeror has received equity and debt commitments, as evidenced in (i) equity commitment letters, (ii) a debt commitment letter and fundable interim facilities agreement executed by Golub Capital LLC and certain affiliated, similarly managed and/or related funds, in each case addressed to the Offeror, and (iii) other undertakings to finance the Tender Offer at completion and compulsory redemption proceedings, if any. The Offeror’s obligation to complete the Tender Offer is not conditional upon the availability of financing (assuming that all the Conditions to Completion are otherwise satisfied or waived by the Offeror) and upon such satisfaction the Offeror will be required to draw down funds subject to the conditions of the equity commitment letters, the debt commitment letter and the interim facilities agreement. Additional information regarding the terms and conditions of the equity commitment letters, the debt commitment letter and the interim facilities agreement, which are required to be met for the funds to be readily available, will be included in the Tender Offer Document and should be reviewed upon publication of the Tender Offer Document.

Future Plans Concerning the Shares

The Offeror’s intention is to acquire all the Shares and Warrants in the Company (on a fully diluted basis). If as a result of the completion of the Tender Offer, the Offeror’s ownership has exceeded 90 per cent of all the Shares and votes in the Company, when calculated together with any Shares otherwise held by the Offeror prior to the date of the announcement of the final result of the Tender Offer, the Offeror will commence as soon as reasonably practicable compulsory redemption proceedings in accordance with the Finnish Companies Act for all the Shares not purchased pursuant to the Tender Offer. Thereafter, the Offeror will apply for the Shares in the Company to be delisted from Nasdaq Helsinki as soon as permitted and reasonably practicable under the applicable laws and regulations and the rules of Nasdaq Helsinki.

The Combination Agreement

The Combination Agreement between Basware and the Offeror sets forth the principal terms under which the Offeror will make the Tender Offer.

Under the Combination Agreement, the Board of Directors of Basware may, at any time prior to the completion of the Tender Offer, withdraw, modify, amend, include conditions to or decide not to issue its recommendation for the shareholders of Basware to accept the Tender Offer or take actions contradictory to its earlier recommendation, only if the Board of Directors of Basware, after having taken certain measures, on the basis of its fiduciary duties under Finnish laws and regulations (including the Helsinki Takeover Code), considers that, due to materially changed circumstances not connected with a breach of the Company’s obligations under the Combination Agreement, the acceptance of the Tender Offer would no longer be in the best interest of the holders of securities, provided, that, if such an action by the Board of Directors of the Company is connected to a superior offer or a competing offer, which the Board of Directors of the Company has determined in good faith to constitute a superior offer if made public, (i) the Board of Directors of the Company has given the Offeror a reasonable opportunity to agree with the Board of Directors of the Company on improving its Tender Offer as contemplated by the Combination Agreement, (ii) the Company has informed the Offeror that the Board of Directors of the Company has determined that such competing offer constitutes a superior offer or would, if announced, constitute a superior offer, as applicable, and (iii) such competing offer has been publicly announced such that it becomes a superior offer.

The Company shall, and shall cause its subsidiaries and their respective officers, directors, employees and representatives to, (a) not actively initiate, solicit or promote, directly or indirectly, any inquiries or any proposal or offer (including any proposal or offer to holders of securities) that constitutes, or would reasonably be expected to lead to, any competing offer or that would otherwise materially harm or hinder the completion of the Tender Offer and (b) not, upon receipt of an unsolicited competing offer, directly or indirectly, promote the progress of such competing offer, except, after the Board of Directors having taken certain measures, in each case, if (and only to the extent that) the Board of Directors of the Company has determined in good faith that such a competing offer constitutes a superior offer, or would, if announced, constitute a superior offer, as applicable and (c) to notify the Offeror within one business day of the Company’s receipt of a competing offer, as applicable, with reasonably detailed information about the competing offer.

The Combination Agreement further includes certain customary representations, warranties, covenants and undertakings by both parties, such as conduct of business by Basware in the ordinary course of business before the completion of the Tender Offer and cooperation by the parties in completing the Tender Offer as contemplated by the Combination Agreement.

The Combination Agreement may be terminated and the Tender Offer may be abandoned by Basware or the Offeror under certain circumstances, including, among others, if the Conditions to Completion have not been satisfied or waived by the Offeror in accordance with the terms and conditions and it is evident that the Conditions to Completion are no longer reasonably capable of satisfaction or upon a material breach of any warranty given by the Company or the Offeror. If the Combination Agreement is terminated due to certain reasons specified in the Combination Agreement, the Company has agreed to pay to the Offeror, and the Offeror has agreed to pay to the Company, on demand, as cost coverage a termination fee for the other party’s out of pocket costs and expenses up to certain agreed-upon amounts.

Advisers

The Offeror has appointed Lazard & Co, Limited as financial adviser, Danske Bank A/S, Finland Branch as financial adviser and arranger, Hannes Snellman Attorneys Ltd and Kirkland & Ellis International LLP as legal advisers and Hill+Knowlton Strategies as communications adviser in connection with the Tender Offer. Basware has appointed Goldman Sachs International as financial adviser and Roschier, Attorneys Ltd. as legal adviser in connection with the Tender Offer.

Media and investor enquiries:

Basware Corporation:

Katariina Kataja
Investor Relations Manager
Basware Corporation
Tel. +358 (0) 40 527 1427
katariina.kataja@basware.com

The Consortium:

Michael Jääskeläinen
Tel. +358 (0)50 571 0514
consortium@hkstrategies.fi

IMPORTANT INFORMATION

THIS RELEASE MAY NOT BE RELEASED OR OTHERWISE DISTRIBUTED, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO, AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND OR SOUTH AFRICA OR IN ANY OTHER JURISDICTION IN WHICH THE TENDER OFFER WOULD BE PROHIBITED BY APPLICABLE LAW.

THIS RELEASE IS NOT A TENDER OFFER DOCUMENT AND AS SUCH DOES NOT CONSTITUTE AN OFFER OR INVITATION TO MAKE A SALES OFFER. IN PARTICULAR, THIS RELEASE IS NOT AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES DESCRIBED HEREIN, AND IS NOT AN EXTENSION OF THE TENDER OFFER, IN, AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND OR SOUTH AFRICA. INVESTORS SHALL ACCEPT THE TENDER OFFER FOR THE SHARES ONLY ON THE BASIS OF THE INFORMATION PROVIDED IN A TENDER OFFER DOCUMENT. THE TENDER OFFER IS NOT BEING MADE, AND THE SHARES WILL NOT BE ACCEPTED FOR PURCHASE FROM OR ON BEHALF OF PERSONS, DIRECTLY OR INDIRECTLY IN ANY JURISDICTION WHERE EITHER AN OFFER OR ACCEPTANCE THEREOF IS PROHIBITED BY APPLICABLE LAW OR WHERE ANY TENDER OFFER DOCUMENT OR REGISTRATION OR OTHER REQUIREMENTS WOULD APPLY IN ADDITION TO THOSE UNDERTAKEN IN FINLAND.

THE TENDER OFFER IS NOT BEING MADE DIRECTLY OR INDIRECTLY IN ANY JURISDICTION WHERE PROHIBITED BY APPLICABLE LAW AND, WHEN PUBLISHED, THE TENDER OFFER DOCUMENT AND RELATED ACCEPTANCE FORMS WILL NOT AND MAY NOT BE DISTRIBUTED, FORWARDED OR TRANSMITTED INTO OR FROM ANY JURISDICTION WHERE PROHIBITED BY APPLICABLE LAWS OR REGULATIONS. IN PARTICULAR, THE TENDER OFFER IS NOT BEING MADE, DIRECTLY OR INDIRECTLY, IN OR INTO, BY USE OF THE POSTAL SERVICE OF, OR BY ANY MEANS OR INSTRUMENTALITY (INCLUDING, WITHOUT LIMITATION, E-MAIL, FACSIMILE TRANSMISSION, TELEX, TELEPHONE OR ELECTRONIC TRANSMISSION BY WAY OF THE INTERNET OR OTHERWISE) OF INTERSTATE OR FOREIGN COMMERCE OF, OR THROUGH ANY FACILITIES OF A NATIONAL SECURITIES EXCHANGE OF, AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND OR SOUTH AFRICA. THE TENDER OFFER CANNOT BE ACCEPTED, DIRECTLY OR INDIRECTLY, BY ANY SUCH USE, MEANS OR INSTRUMENTALITY OR FROM WITHIN, AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND OR SOUTH AFRICA AND ANY PURPORTED ACCEPTANCE OF THE TENDER OFFER RESULTING DIRECTLY OR INDIRECTLY FROM A VIOLATION OF THESE RESTRICTIONS WILL BE INVALID.

THIS STOCK EXCHANGE RELEASE HAS BEEN PREPARED IN COMPLIANCE WITH FINNISH LAW, THE RULES OF NASDAQ HELSINKI AND THE HELSINKI TAKEOVER CODE AND THE INFORMATION DISCLOSED MAY NOT BE THE SAME AS THAT WHICH WOULD HAVE BEEN DISCLOSED IF THIS ANNOUNCEMENT HAD BEEN PREPARED IN ACCORDANCE WITH THE LAWS OF JURISDICTIONS OUTSIDE OF FINLAND.

Information for shareholders of Basware in the United States

Shareholders of Basware in the United States are advised that the Shares are not listed on a U.S. securities exchange and that Basware is not subject to the periodic reporting requirements of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is not required to, and does not, file any reports with the U.S. Securities and Exchange Commission (the “SEC”) thereunder.

The Tender Offer will be made for the issued and outstanding shares of Basware, which is domiciled in Finland, and is subject to Finnish disclosure and procedural requirements. The Tender Offer is made in the United States pursuant to Section 14(e) and Regulation 14E under the Exchange Act, subject to exemptions provided by Rule 14d-1(d) under the Exchange Act for a “Tier II” tender offer, and otherwise in accordance with the disclosure and procedural requirements of Finnish law, including with respect to the Tender Offer timetable, settlement procedures, withdrawal, waiver of conditions and timing of payments, which are different from those of the United States. In particular, the financial information included in this announcement has been prepared in accordance with applicable accounting standards in Finland, which may not be comparable to the financial statements or financial information of U.S. companies. The Tender Offer is made to the Company’s shareholders resident in the United States on the same terms and conditions as those made to all other shareholders of the Company to whom an offer is made.

To the extent permissible under applicable law or regulations, the Offeror and its affiliates or its brokers and its brokers’ affiliates (acting as agents for the Offeror or its affiliates, as applicable) may from time to time after the date of this stock exchange release and during the pendency of the Tender Offer, and other than pursuant to the Tender Offer, directly or indirectly, purchase or arrange to purchase the Shares or any securities that are convertible into, exchangeable for or exercisable for the Shares. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. To the extent information about such purchases or arrangements to purchase is made public in Finland, such information will be disclosed by means of a press release or other means reasonably calculated to inform U.S. shareholders of such information. No purchases will be made outside the Tender Offer in the United States by or on behalf of the Offeror. In addition, the financial advisers to the Offeror may also engage in ordinary course trading activities in securities of the Company, which may include purchases or arrangements to purchase such securities. To the extent required in Finland, any information about such purchases will be made public in Finland in the manner required by Finnish law.

Neither the SEC nor any U.S. state securities commission has approved or disapproved the Tender Offer, passed upon the merits or fairness of the Tender Offer, or passed any comment upon the adequacy, accuracy or completeness of the disclosure in this stock exchange release. Any representation to the contrary is a criminal offence in the United States.

The receipt of cash pursuant to the Tender Offer by a U.S. holder of Shares may be a taxable transaction for U.S. federal income tax purposes and under applicable U.S. state and local, as well as foreign and other, tax laws. Each holder of Shares is urged to consult its independent professional adviser immediately regarding the tax consequences of accepting the Tender Offer.

It may be difficult for the Company’s shareholders to enforce their rights and any claims they may have arising under the U.S. federal securities laws, since the Company is located in a non-U.S. jurisdiction, and some or all of its officers and directors may be residents of non-U.S. jurisdictions. The Company’s shareholders may not be able to sue the Company or its officers or directors in a non-U.S. court for violations of the U.S. federal securities laws. It may be difficult to compel the Company and its affiliates to subject themselves to a U.S. court’s judgment.

Forward-looking statements

This stock exchange release contains statements that, to the extent they are not historical facts, constitute “forward-looking statements”. Forward-looking statements include statements concerning plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, competitive strengths and weaknesses, plans or goals relating to financial position, future operations and development, business strategy and the trends in the industries and the political and legal environment and other information that is not historical information. In some instances, they can be identified by the use of forward-looking terminology, including the terms believes”, “intends”, “may”, “will” or “should” or, in each case, their negative or variations on comparable terminology. By their very nature, forward-looking statements involve inherent risks, uncertainties and assumptions, both general and specific, and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved. Given these risks, uncertainties and assumptions, investors are cautioned not to place undue reliance on such forward-looking statements. Any forward-looking statements contained herein speak only as at the date of this stock exchange release.

Disclaimers

Lazard & Co., Limited (“Lazard”), which is authorized and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as financial advisor to the Offeror and no one else in relation to the Tender Offer or the matters referred to in this announcement and will not be responsible to anyone other than the Offeror for providing the protections afforded to clients of Lazard nor for providing advice in relation to the Tender Offer or any other matters referred to in this announcement. Neither Lazard nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Lazard in connection with this announcement, any statement contained herein or otherwise.

Danske Bank A/S, Finland Branch is acting exclusively for the Offeror and no one else in relation to the Tender Offer or the matters referred to in this document, will not regard any other person than the Offeror as its client in relation to the Tender Offer and will not be responsible to anyone other than the Offeror for providing the protections afforded to its clients nor for providing advice in relation to the Tender Offer or any other transaction or arrangement referred to in this document.

Goldman Sachs International, which is authorized by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting exclusively for Basware and no one else in connection with the Tender Offer and the matters set out in this announcement. Neither Goldman Sachs International nor its affiliates, nor their respective partners, directors, officers, employees or agents are responsible to anyone other than Basware for providing the protections afforded to clients of Goldman Sachs International, or for giving advice in connection with the Tender Offer or any matter or arrangement referred to in this announcement.