Thomson Reuters has been approved to become a 53% owner of Swedish tax and e-invoicing solutions provider Pagero, beating other rivals in a bidding war that broke out in December.
On Dec. 13, indirect tax solutions provider Vertex announced plans to acquire 100% of the shares of Pagero Group AB at a price of 36 Swedish krona in cash per share, equivalent to a total tender value of approximately $555 million. (1 US dollar is worth about 10 Swedish Krona). The bid was, at first, well-received by the company, whose bid committee unanimously recommended accepting the offer. The acceptance period of the offer was expected to commence on or around Dec. 15, 2023 and end on or around Jan. 23, 2024.
On Jan. 11, though, the same committee withdrew its recommendation, saying instead that the company should accept a new bid from Thomson Reuters. The company offered SEK 40 for each share over Vertex's offer of 36, a roughly 11% higher offer. While the committee said some members of the board still support the Vertex acquisition, it nonetheless decided the Thomson Reuters offer was the better choice.
The next day, Jan. 12, Pagero then announced another public offer, this time from sales tax automation solutions provider Avalara. The company said it would pay SEK 45 per share versus the previous SEK 40 per share offered by Thomson Reuters. It did not, however, shift its recommendation this time, but instead said it would evaluate the new bid.
Meanwhile, on Jan. 14, Vertex announced it was withdrawing its bid.
Which brings us to yesterday, Jan. 15, at which point Thomson Reuters came out with an even bigger bid of SEK 50 per share. This would be about $789 million, according to Reuters itself. The bidding committee unanimously recommended that the company take this deal over Avalara's. This, ultimately, became the one that stuck. Thomson Reuters said it has now acquired approximately 53.81% of the shares in Pagero Group AB.
What made this company the belle of the ball that there would be such fierce competition for its shares? One factor cited by its suitors was its e-invoicing capacities. At this point, according to Thomson Reuters, more than 80 countries have either announced or have already implemented legal requirements for e-invoicing and continuous transaction control regulations, which will likely drive demand for e-invoicing solutions. Globally, the e-invoicing market is expected to grow from $4.84 billion in 2019 to $15.5 billion in 2027.
The acceptance period for the offer expires on Feb. 9, 2024. Settlement for all shares tendered in the offer is expected to be initiated on or around Feb. 16, 2024.
UPDATE: On Jan. 18, 2024 Avalara officially announced it was withdrawing its bid for Pagero in light of Thomson Reuters' higher cash consideration.
