Mercell Holding - Contemplated private placement and contemplated acquisition
Oslo, Norway, 1 June 2021
Mercell Holding ASA (“Mercell” or the “Company”) contemplates a private placement of new shares in the Company generating gross proceeds of approximately NOK 400 million (the “Offer Shares”) (the "Private Placement"). In addition, the Company has secured pre-commitments for a tap issue of SEK 500m of the existing SEK 1,100m bond issue, which has a framework amount of SEK 2,000m (the “Tap Issue”).
ABG Sundal Collier ASA ("ABGSC") and Pareto Securities AS (“Pareto”) are acting as joint bookrunners (the “Joint Bookrunners”) in connection with the Private Placement, and have conducted a pre-sounding prior to public launch of the Private Placement with selected existing shareholders as well as new investors and have received interest indications exceeding the size of the Private Placement.
The net proceeds from the Private Placement and the Tap Issue are intended to be used to partly fund a contemplated acquisition of Cloudia Oy (“Cloudia” or the “Target”).
Mercell is a leading provider of public e-tendering services in Scandinavia, and the acquisition of Cloudia fortifies the company’s Nordic position ahead of its planned expansion into continental Europe. Mercell offers software-based workflow solutions for both buyers and suppliers, securing that public buyers comply with EU regulations for public procurement and that suppliers are notified of all relevant tenders. As of Q1 2021, total annual recurring revenues (“ARR”) amounted to NOK 634 million, up from NOK 235 million in Q1, 2020.
Cloudia is the leading Finnish e-Procurement platform, focusing primarily on public buyers. The Cloudia SaaS platform covers the entire procurement lifecycle with modules for sourcing, planning, contract and supplier management, meeting all the digital needs of the private and public sector. The customer base includes 95 of the 100 largest Finnish municipalities and 10 of the largest cities. In 2020, Cloudia had revenues of EUR 9.2 million and ARR base of EUR 8.8 million. The EBITDA margin was 30%. At the end of Q1 2021, Cloudia’s ARR base had grown to EUR 9.3 million.
Mercell intends to acquire Cloudia for EUR 102.5 million on a cash and debt free basis. EUR 89.6 million will be paid in cash on closing, reflecting a net debt adjustment of EUR 2.9m, and the remaining EUR 10 million will be paid in Mercell shares during 2022 subject to satisfaction of retention and performance targets (based on the share price at the time of issue). Financial, tax, legal and technology due diligence of the Target has been completed and signing and closing of the transaction is only subject to financing (i.e completion of the Private Placement and the Tap Issue).
Key acquisition rationale for Mercell:
- A unique position in source-to-contract in the Finnish market
- Access to long-standing relationships with tier-1 customers
- Opportunity to establish a dual platform by developing the supplier-side of the Finnish market
- Opportunity to cross-sell post-award products into the Finnish market
The Private Placement will be directed towards Norwegian and international institutional investors, in each case subject to and in compliance with applicable exemptions from relevant prospectus or registration requirements.
The Private Placement will be completed prior to the acquisition of Cloudia and there can be no assurance that the acquisition of Cloudia will not be delayed, that the terms and conditions for the acquisition will not be changed nor that it will take place at all. The contemplated Tap Issue is conditional on the completion of the acquisition.
The subscription price and the total number of Offer Shares to be issued will be determined through an accelerated bookbuilding process. The bookbuilding period commences today at 16:30 CEST and will close at 08:00 CEST on 2nd June 2021. The bookbuilding period may, at the sole discretion of the Company and the Joint Bookrunners, be shortened or extended at any time and for any reason. If the bookbuilding period is shortened or extended, the other dates referred to herein may be changed correspondingly.
The Company will announce the final number of Offer Shares placed and the final subscription price in the Private Placement in a stock exchange announcement expected to be published before the opening of trading on the Oslo Stock Exchange tomorrow, 2nd June 2021. Completion of the Private Placement is subject to all corporate resolutions of the Company required to implement the Private Placement being adopted, including the resolution by the Company's board of directors to increase the share capital and issue the Offer Shares pursuant to an authorisation granted by the annual general meeting held on 22 April 2021.
The minimum subscription and allocation amount in the Private Placement will be the NOK equivalent of EUR 100,000, provided that the Company may, at its sole discretion, allocate an amount below EUR 100,000 to the extent applicable exemptions from the prospectus requirement pursuant to applicable regulations, including the Norwegian Securities Trading Act and ancillary regulations, are available. Notification of allotment and payment instructions is expected to be issued to the applicants being allocated Offer Shares on or about 2nd June 2021 through a notification to be issued by the Joint Bookrunners. The allocation will be determined following the expiry of the bookbuilding period and the final allocation will be made by the Company's board of directors.
The Offer Shares allocated in the Private Placement are expected to be settled through a delivery versus payment (DvP) transaction by delivery of existing and unencumbered shares in the Company, that are already listed on Euronext Growth, pursuant to a share lending agreement expected to be entered into between the Company, Viking Venture 16 AS and Viking Venture 16B AS as share lenders and ABGSC (on behalf of the Joint Bookrunners). Consequently, the Offer Shares will be tradable from allocation. ABGSC, on behalf of the Joint Bookrunners, will settle the shares borrowed from the share lenders with a corresponding number of new shares in the Company to be issued by the board of directors pursuant to the above mentioned authorisation to increase the share capital.
The Private Placement represents a deviation from the shareholders' pre-emptive right to subscribe for the Offer Shares. The board of directors has considered the Private Placement in light of the requirements in the Norwegian Public Limited Companies Act and the rules of equal treatment set out in the Continuing Obligations for companies admitted to trading on Euronext Growth and Oslo Børs' guidelines on the rules of equal treatment. The board of directors has in this respect inter alia taken into consideration that it is necessary to secure financing of the acquisition of the Target prior to signing an agreement for the acquisition. The board of directors has on this basis concluded that the Private Placement is in compliance with these requirements.
Subject to completion of the Private Placement, and based on the final result of the Private Placement, the Board will also consider whether to conduct a subsequent repair offering or not (the "Subsequent Offering"). If conducted, such offering will be directed towards shareholders as of 1 June 2021 (as registered in VPS on 3 June 2021) who (i) were not allocated shares in the Private Placement and (ii) are not resident in other jurisdictions than Norway in which such offer would be unlawful or require a prospectus, filing, registration or similar action.
The investor presentation to be used in connection with the Private Placement is attached hereto.
Advokatfirmaet Thommessen AS acts as legal advisor to the Company in connection with the Private Placement and Advokatfirmaet Schjødt AS is acting as legal advisor to the Joint Bookrunners in connection with the Private Placement.
For additional information, please contact:
Fredrik Eeg, CFO
Mobile phone: +47 908 33 378
Email: freg@mercell.com
This is Mercell
Mercell is a leading digital platform for public eTendering and entered the eProcurement market in 2020. The company has approximately 3,000 buyers and some 26,000 suppliers as customers. Mercell's unique marketplace simplifies the tender and procurement process and makes it easy and secure for buyers to find relevant suppliers for their tenders and purchasing needs, and enables suppliers to find relevant business opportunities and receive and handle purchases from public and private buyers. Mercell delivers services to public and private buyers in 13 European countries with the goal of becoming the leading software-as-a-service (SaaS)-platform for eTendering and eProcurement in Europe. Through the acquisition of Negometrix in February 2021, Mercell also became market leader in the Netherlands and established a foothold in the US market.
Important Notice
This announcement is not, and does not form a part of, any offer to sell, or a solicitation of an offer to purchase, any securities of the Company. The distribution of this announcement and other information may be restricted by law in certain jurisdictions. Copies of this announcement are not being made and may not be distributed or sent into any jurisdiction in which such distribution would be unlawful or would require registration or other measures. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions.
The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and accordingly may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and in accordance with applicable U.S. state securities laws. The Company does not intend to register any part of the offering or their securities in the United States or to conduct a public offering of securities in the United States. Any sale in the United States of the securities mentioned in this announcement will be made solely to "qualified institutional buyers" as defined in Rule 144A under the Securities Act.
In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that EEA Member State within the meaning of the Prospectus Regulation, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State. The expression "Prospectus Regulation" means Regulation 2017/1129 as amended together with any applicable implementing measures in any EEA Member State.
This communication is only being distributed to and is only directed at persons in the United Kingdom that are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or (ii) high net worth entities, and other persons to whom this announcement may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only for relevant persons and will be engaged in only with relevant persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.
Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "strategy", "intends", "estimate", "will", "may", "continue", "should" and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, the assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond the Company's control.
Actual events may differ significantly from any anticipated development due to a number of factors, including without limitation, changes in investment levels and need for the Company's services, changes in the general economic, political and market conditions in the markets in which the Company operates, the Company's ability to attract, retain and motivate qualified personnel, changes in the Company's ability to engage in commercially acceptable acquisitions and strategic investments, and changes in laws and regulation and the potential impact of legal proceedings and actions. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by forward-looking statements. The Company does not provide any guarantees that the assumptions underlying the forward-looking statements in this announcement are free from errors nor does it accept any responsibility for the future accuracy of the opinions expressed in this announcement or any obligation to update or revise the statements in this announcement to reflect subsequent events. You should not place undue reliance on the forward-looking statements in this document.
The information, opinions and forward-looking statements contained in this announcement speak only as at its date and are subject to change without notice. The Company does not undertake any obligation to review, update, confirm, or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this announcement.
Neither of the Joint Bookrunners nor any of their respective affiliates make any representation as to the accuracy or completeness of this announcement and none of them accept any responsibility for the contents of this announcement or any matters referred to herein.
This announcement is for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities in the Company. Neither the Joint Bookrunners nor any of their respective affiliates accept any liability arising from the use of this announcement.
This announcement is an advertisement and is not a prospectus for the purposes of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on prospectuses to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (as amended) as implemented in any Member State. If the Subsequent Offering is carried out, the Company will prior to the commencement of such offering publish an offering prospectus, subject to the approval of such prospectus by the Norwegian Financial Supervisory Authority. Such prospectus will be made available at the Company's website, www.mercell.com.
This information is considered to be inside information pursuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to section 5-12 the Norwegian Securities Trading Act.
This stock exchange announcement was published by Fredrik Eeg, CFO at Mercell Holding ASA on 1st June 2021 at 16:30 CEST on behalf of the Company.