Transcendent Group AB (publ) intends to list on Nasdaq First North Premier Growth Market

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Transcendent Group AB (publ) ("Transcendent Group" or the "Company"), a fast-growing consulting company specializing in Governance, Risk and Compliance (“GRC”), today announces its intention to launch an initial public offering and  to list its shares on Nasdaq First North Premier Growth Market ("The Offering or the "IPO").

• A potential offer will be implemented at a price of SEK 31 per share, corresponding to a pre-money valuation of approximately SEK 170 million.
• A potential offer consists of a new issue of shares corresponding to approximately SEK 30 million (before transaction costs) and a sale of existing shares by the principal owners corresponding to approximately SEK 20 million.
• The principal owners will hold a total of approximately 57.4% of the number of shares after the Offering.
• Prior to the Offering, Swedbank Robur has undertaken, at the same price as for other investors, to acquire shares in the Offering at a value of SEK 18 038 869, corresponding to approximately 36% of the Offering. Swedbank Robur's commitment is subject to certain conditions. If any of these conditions are not met, Swedbank Robur may refuse to fulfill its obligations.
• A potential Offering requires that a prospectus is to be approved and registered by the Swedish Financial Supervisory Authority. Following approval, the prospectus is estimated to be published around the beginning of week 40. First day of trading is expected to take place week 43.
• Full terms of the Offering will be included in the prospectus.

Transcendent Group is a fast-growing consultancy specialized in Governance, Risk and Compliance. Transcendent Group tailor make solutions to ensure its clients security in a world in constant change with increasing operational risks, regulatory requirements and an increased demand for professional governance. The Company successfully recruits experienced coworkers, primarily with previous experience from large global audit companies.

Transcendent Group’s growth strategy is to expand both on established markets and internationally by geographical expansion to markets with a high demand for GRC-services. The geographical expansion in combination with service- and product development creates a good foundation for sustainable growth.

During 2019, Transcendent Group launched a new innovative and digital product called RFA (Regulatory Framework Application) within the business area RegTech (Regulatory Technology). RegTech aims to be at the forefront of digitalization of GRC-services. RFA is already used by several clients and Transcendent Group believes that the product and business area have great potential to grow.

To enable further growth through new entities on established and new markets and to realize the potentials in the new business area RegTech, Transcendent Group’s Board intends to execute the Offering and list the Company’s shares.

Martin Malm, CEO Transcendent Group, comments: 
“Transcendent Group is a value-driven company with a culture that differentiates us on the GRC-market. Thanks to our unique culture, we attract experienced coworkers who in turn attracts clients. This is a strategy that works on all markets where there is a demand for Transcendent Group’s services. Companies like Transcendent Group are usually partner-owned, and a listing would therefore make Transcendent Group a unique listed company with a strong market position in a fast-growing and highly relevant industry.”

Håkan Berg, Chairman of the Board Transcendent Group, comments: 
“Transcendent Group is governed by the core values trust, professionalism, contribution and personal, which are values that are equally relevant in a listed environment. The Board believes that the listing will strengthen Transcendent Group’s public profile and ensure that employees and investors can take an even greater part of our value creation. In addition, the listing is a quality stamp leading to increased transparency and clarity towards the market, which is positive for both existing and future client relationships.”

Transcendent Group in short:
Transcendent Group has a well-established and stable business in the Nordic region, and an increasing international presence and growth strategy. As of today, Transcendent Group has offices in 8 countries. The consultant is central in Transcendent Group’s offering and the Company’s ability to identify, attract, maintain and develop the best consultants within GRC is a critical reason for Transcendent Group’s success.  The Company has a diversified, broad, multi-industrial client portfolio with over 400 clients across a variety of sectors and client profiles. Transcendent Group’s largest client segment consist of banks, insurance companies and credit institutions and the Company’s largest service areas are Information Security, Privacy and Compliance in 2018.

Historical financial development
Transcendent Group has had a strong compound annual growth rate since 2016 of 22% and a proven ability to generate profitability. In 2018, Transcendent Group reported sales of SEK 181 million, a sales growth of 22.6% compared to the previous year. EBITDA amounted to SEK 13 million, corresponding to a margin of 7.1%.

Financial targets
As of 2020, Transcendent Group will increase its pace further, which is enabled by the forthcoming Offering.

Transcendent Group has adopted the following financial targets:

• An annual turnover (net sales) growth of at least 30% over a 3-year cycle.
• Even under strong growth and expansion, the goal is to maintain an EBITDA level of at least 7%.
• As the business expands and sales related to the high-margin business area RegTech increase, the EBITDA margin is expected to be greatly strengthened with the target of an EBITDA margin of at least 25% and a turnover of SEK 1.2 billion by 2025.

Advisors
Avanza Bank is the financial advisor. KANTER is the legal advisor to the Transcendent Group.

About Swedbank Robur
One of Scandinavia’s largest mutual fund managers with over SEK 1400 billion of assets under management (AUM) that serves approximately 3.1MM customers in Sweden and 1.1MM in the Baltic Region. Altogether there are approximately 80 investment funds under the Swedbank Robur brand covering all major regions, sectors and asset classes. A few of the funds have a strategy to invest in unlisted companies in a pre-IPO phase. The Microcap fund are one of them.

Microcap fund – was launched in May 2017 and is a concentrated fund which focuses on companies with business models that showcase a high degree of business innovation in the Nordic region.

For more information, please contact:
Martin Malm, CEO Transcendent Group
Martin.Malm@transcendentgroup.com
+46 73 335 94 26

Important information
This announcement is not an offer or invitation to subscribe, acquire or in another way trade with shares or other financial instruments issued by the Company. Any offering to subscribe for the securities referred to in this communication will be made by means of a prospectus that will be provided by Transcendent Group AB (publ) following approval and registration by the Swedish Financial Supervisory Authority (the “SFSA”). This communication is an advertisement and not a prospectus for the purpose of the Prospectus Regulation. Investors should not acquire any securities referred to in this communication except on the basis of information contained in a prospectus. Any approval and registration by the SFSA of the prospectus shall not be considered as an endorsement of the securities that are the subject of the prospectus.

In relation to each member state of the EEA, 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 Commission Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 (the “Prospectus Regulation”).

Neither this announcement nor the publication in which it is contained is for publication or distribution, directly or indirectly, in Australia, Hong Kong, Japan, Canada, New Zealand, Switzerland, Singapore, South Africa or in the United States of America or in other jurisdiction where such offer or sale would be unlawful or subject to legal restrictions or require registration or other measures other than those required by Swedish law. The Company has not taken and will not take any actions to allow an offer to the public in any jurisdiction other than Sweden. The 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, subscribed, sold or transferred, directly or indirectly, in or into the United States. Measures in violation of the restrictions may constitute a breach of applicable securities law.

In the United Kingdom, this document and any other materials in relation to the securities described herein is only being distributed to persons 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 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

Forward-looking statements
Matters discussed in this communication 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”, “intend”, “may”, “plan”, “estimate”, “will”, “should”, “could”, “aim” or “might”, or, in each case, their negative, or 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 the expectations reflected in these forward-looking statements are reasonable,

it can give no assurances that they will materialise or prove to be correct. Because these statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward-looking statements as a result of many factors. 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 such forward-looking statements. The Company does not guarantee that the assumptions underlying the forward-looking statements in this presentation are free from errors nor does it accept any responsibility for the future accuracy of the opinions expressed in this presentation or any obligation to update or revise the statements in this presentation to reflect subsequent events. Undue reliance should not be placed on the forward-looking statements in this document.

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 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 communication.