Pagero Group intends to list its shares on Nasdaq First North Growth Market

The Offering in brief

Should the Company proceed with the Listing, the Offering is expected to consist of:

• An offering to the general public in Sweden.
• An offering to the institutional investors in Sweden and abroad.

The Offering to institutional investors will only be directed to certain institutional investors outside the United States pursuant to Regulation S in accordance with the S Securities Act of 1933, as amended (”Securities Act”).

The Offering is expected to consist of both newly issued shares and existing shares in the Company. With the newly issued shares the Offering is expected to bring gross proceeds of approximately SEK 500 million to the Company, before issue costs related to the Offering. A few existing shareholders, including Summa Equity, are expected to sell a part theirs existing shares. Further, certain shareholders will undertake to sell existing shares in order to cover potential over-allotment in connection with the Offering, corresponding to not more than 15 per cent of the total number of shares included in the Offering.

Pagero intends to use the net proceeds mainly to finance future increased and long-term growth and other operational related purposes as they arise.

Funds managed by I&T Asset Management (Fondsmæglerselskabet Investering & Tryghed A/S) and Swedbank Robur Fonder, (together the “Cornerstone Investors”) have, subject to certain conditions, agreed to acquire shares in the Offering for an amount in total of SEK 230 million, based on a valuation not exceeding SEK 24 per share, corresponding to a pre-money valuation of SEK 3,201 million. Swedbank Robur Fonder is prior to the Offering an existing shareholder of the Company.

Full terms, conditions and instructions for the Offering will be included in the prospectus intended to be published by the Company in connection with the Listing and will then be available at the Company’s website www.pagero.com, Nordea Bank Abp, filial i Sverige’s, website www.nordea.se and Skandinaviska Enskilda Banken AB’s website www.seb.se.

About Pagero

Pagero aims to build the world’s largest open business network with the ambition that more than 100 million companies should be reachable via its network 2025. Today, the Company offers its products and services globally in over 140 countries and estimates that more than 12 million companies are reachable via its network (including Gosocket Corporation that was acquired in July 2021).

Pagero offers a smart business network connecting buyers and sellers world-wide for automatic and secure communication of business documents (e.g. order messages, invoices and payment instructions), and in order to ensure local compliance. Pagero’s open network, in combination with a large selection of applications, helps companies’ buying and selling processes to become more effective, and to make use of correct and reliable data. Pagero’s offer is global and independent of industry, business system and size of business.

Pagero undergoes a global growth journey supported by a rapidly increasing market demand driven by strong drivers such as digitalisation and an accelerated rollout of regulatory requirements for digital trading all over the world. During the last years, Pagero has demonstrated good growth at the same time as the Company has focused on developing its technology platform and sales strategy to meet an increased global demand, and to enable faster and more cost-efficient growth.

Pagero’s headquarter is located in Gothenburg and the Company has a total of 31 offices in 20 countries. As of 30 June 2021, Pagero had 580 full-time resources, including 120 employees through Gosocket.

Financial overview

Pagero's financial profile is characterised by good revenue growth and improved profit margins. Between 31 December 2018 and 31 December 2020 the annualised recurring revenue (”ARR”)² grew at a compound annual growth rate (CAGR) of 21 per cent. As of 30 June 2021, Pagero's ARR amounted to SEK 370 million and the EBITDA-margin in established markets³ corresponded to 36 percent for the six-month period ended 30 June 2021. Gosocket’s ARR amounted to SEK 73 million as of 30 June 2021.

Strengths and competitive advantages

Pagero believes it has the following strengths and competitive advantages that are expected to contribute to realising the Company's strategy and meeting its financial targets:

• Operating in a growing global market driven by digitalisation and an accelerating rollout of regulatory requirements.
• Uniquely positioned as the only truly open and network-centric service for cloud-based process management of digital business documents.
• Well-invested and scalable technical platform with a clear product vision to drive growth in the network.
• Efficient sales and marketing platform increasingly driven by partners, self-service and network effects.
• Strong financial history and a scalable business model with recurring and diversified revenues.
• Competent management team with extensive experience in the business systems industry.

A more comprehensive description of the Company’s most important strengths and competitive advantages will be included in the prospectus that is expected to be published by Pagero.

Financial targets and dividend policy

Pagero has a clear growth strategy to achieve its vision of becoming the world's largest open business network. In the light of this, Pagero’s board of directors has adopted the following financial targets:

• Growth: Increase ARR to at least SEK 1,500 million at the end of the financial year 2025.
• Profitability: Achieve an EBITA-margin of approximately 20 percent by the end of the financial year 2025 while maintaining a strong focus on growth.
• Dividend policy: Pagero intends to re-invest its cash flows into growth initiatives and will therefore not pay annual dividends in the foreseeable future.

Pagero's financial targets and dividend policy set out above represent prospective information. The financial targets are based on a number of estimates and assumptions related to, e.g. the development of Pagero’s industry, business, results and financial position, and are subject to risks and uncertainties. Management’s key assumptions supporting the financial targets above will be described more in-depth in the prospectus that is expected to be published by Pagero.

About Summa Equity

Summa Equity was founded in 2016 by partners with a shared vision of building a leading specialised private equity firm for small and medium sized enterprises. The firm invests in sectors related to three thematic megatrends: resource scarcity, changing demographics and tech-enabled businesses, and has built a portfolio of companies that contributes to a positive development of UN’s Sustainability goals in the areas such as health, education, agriculture, water, sanitation and technology. Examples of present and previous holdings includes EcoOnline, Olink and Sortera.

Advisors

Nordea Bank Abp, filial i Sverige (“Nordea”), and Skandinaviska Enskilda Banken AB (“SEB”) are Joint Global Coordinators and Joint Bookrunners. Advokatfirman Delphi and advokat 24 are legal advisors to the Company. White & Case is legal advisor to Joint Global Coordinators and Joint Bookrunners. Nordea, SEB and Avanza Bank AB act as Retail Distributors.

Erik Penser Bank AB (publ) is appointed as the Company’s Certified Adviser and can be reached at telephone: +46 (0) 8 463 83 00 and e-mail: certifiedadviser@penser.se.

For further information, please contact:

Bengt Nilsson, CEO

E-mail: bengt.nilsson@pagero.com

Jan-Olof Ohlsson, CFO

E-mail: jan-olof.ohlsson@pagero.com

Important information

This announcement is not an offer to sell or a solicitation of any offer to buy any securities issued by Pagero Group AB (publ) (the “Company”) in any jurisdiction where such offer or sale would be unlawful.

Any offering of the securities referred to in this announcement will be made by means of a prospectus. This announcement 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 the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (together with any related implementing and delegated regulations, the “Prospectus Regulation”). Investors should not invest in any securities referred to in this announcement except on the basis of information contained in the aforementioned prospectus. In any EEA Member State, other than Sweden, this communication is only addressed to, and is only directed at, qualified investors in that Member State within the meaning of the Prospectus Regulation.

This announcement and the information contained herein are not for distribution in or into the United States of America. This announcement does not constitute an offer to sell, or a solicitation of an offer to purchase, any securities in the United States. Any securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. There is no intention to register any securities referred to herein in the United States or to make a public offering of the securities in the United States.

Any securities referred to herein have not either been and will not be registered under relevant securities laws in Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, South Africa or Switzerland, and may not, with certain exemptions, be offered or sold in or into, or on behalf of a principal who is from, present in or giving an order to participate from Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, South Africa or Switzerland. There will be no offering of the securities referred to herein to Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, South Africa or Switzerland.

In any EEA Member State other than Sweden, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Regulation.

In the United Kingdom, this announcement and any other materials in relation to the securities described herein is only being distributed to, and is only directed at, and any investment or investment activity to which this announcement relates is available only to, and will be engaged in only with, qualified investors (as defined in the Prospectus Regulation) and who are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 200 (as amended, the “Order”), (ii) are persons falling within Article 4 (2)(a) to (d) (“high net worth companies, unincorporated associations etc”) of the Financial Promotion Order, and (iii) 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 announcement must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this announcement relates is available only to 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.

Forward-looking statements

This announcement contains certain prospective statements and opinions. Prospective statements are all statements that do not relate to historical facts and events, and such statements and opinions that pertain to the future and include words such as, for example, "anticipates", "may", "will", "should", "plans", "estimates", "forecasts", "estimates", "is of the opinion", "expects", "believes", "plans", "estimates", "intends", "assumes" and similar expressions. Prospective statements are based on current estimates and assumptions, which have been made to the best of the Company's knowledge. Such prospective statements are subject to risks, uncertainties and other factors that could cause actual results, including the Company’s cash flow, financial situation and results of operations, to differ materially from those expressed or implied by such statements, or cause the expectations expressed or implied by such statements not to be realised or to prove less favourable compared with the results expressed or implied by such statements. The information, opinions and forward-looking statements contained in this communication 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 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.

Information to distributers

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the shares have been subject to a product approval process, which has determined that such shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "EU Target Market Assessment"). Solely for the purposes of each manufacturer's product approval process in the United Kingdom, the target market assessment in respect of the shares in the Company has led to the conclusion that: (i) the target market for such shares is only eligible counterparties, as defined in the FCA Handbook Conduct of Business Sourcebook, and professional clients, as defined in Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 ("UK MiFIR"); and (ii) all channels for distribution of such shares to eligible counterparties and professional clients are appropriate (the "UK Target Market Assessment" and, together with the EU Target Market Assessment, the "Target Market Assessment").

Notwithstanding the Target Market Assessment, distributors should note that: the price of the shares in the Company may decline and investors could lose all or part of their investment; the shares in the Company offer no guaranteed income and no capital protection; and an investment in the Company's shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Offering.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II or UK MiFIR; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the shares in the Company.

Each distributor is responsible for undertaking its own Target Market Assessment in respect of the shares in the Company and determining appropriate distribution channels

¹By holding in Vålåuggen Invest AB as shareholder in the Company.

²Contracted revenues for the next 12 months and transaction revenues for the trailing 12 months. Contracted revenue streams are invoiced and accrued over 12 months, implying that ARR may be higher than corresponding net sales figure.

³Established markets refers to the Nordics and DACH (the three German-speaking countries Germany, Austria and Switzerland). The geographical breakdown in this case is determined by the country to which the customer invoice is sent.