EQS Group-News: SoftwareONE Holding AG
/ Key word(s): IPO
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SoftwareONE launches IPO on SIX Swiss Exchange and sets price range at CHF 16.50 to CHF 21.00 per share
STANS, Switzerland I 11 October 2019 - SoftwareONE Holding AG, a leading and fast-growing global provider of end-to-end software and cloud technology solutions, today announced the launch of its initial public offering on SIX Swiss Exchange. The publication of the offering memorandum and the start of the book-building period will take place on 14 October 2019.
- Base offering consisting of 38,549,464 existing shares and over-allotment option comprising up to 5,782,419 existing shares
- Price range set at CHF 16.50 to CHF 21.00 per share, implying offer size of approximately CHF 636.1 million to CHF 809.5 million for base offering and, based on number of shares outstanding, total market capitalization of approximately CHF 2.5 billion to CHF 3.2 billion
- Listing and first trading day expected on or around 25 October 2019
- Based on total issued share capital, free float expected at approximately 24.3% before exercise of over-allotment option and 28.0% if over-allotment option is exercised in full
- The three founding shareholders will jointly retain the largest stake in SoftwareONE, while KKR will keep a significant stake following the IPO
- Board of Directors strengthened with José Alberto Duarte, Timo Ihamuotila and Marie-Pierre Rogers as additional independent members
The base offering comprises 38,549,464 existing shares, representing 24.3% of the total issued share capital of SoftwareONE, offered by KKR, Peruni Holding (the previous owner of Comparex acquired by SoftwareONE effective 31 January 2019), staff and other shareholders. Furthermore, KKR and Peruni Holding have granted the joint global coordinators an over-allotment option of up to 5,782,419 existing shares.
The price range for the offered shares has been set at CHF 16.50 to CHF 21.00 per share, implying an offer size of CHF 636.1 million to CHF 809.5 million for the base offering (CHF 731.5 million to CHF 931.0 million including the over-allotment option) and a total market capitalization of approximately CHF 2.5 billion to CHF 3.2 billion (based on the number of shares outstanding, i.e. excluding treasury shares).
Additional offering details
The offering memorandum will be published on Monday, 14 October 2019. The book-building period is expected to run from 14 October to 24 October 2019, 12.00 noon CEST for retail and private banking orders and 15.00 CEST for institutional investors. The final offer price is expected to be published on or around 25 October 2019 before market opening. The listing of the shares and start of trading on SIX Swiss Exchange is expected to take place on or around 25 October 2019.
SoftwareONE as well as all members of the Board of Directors and the Executive Board have committed to a lock-up period of twelve months from the first trading day. The selling shareholders have agreed to a lock-up of six months following the first day of trading.
The founding shareholders Daniel von Stockar, René Gilli and Beat Curti will jointly retain the largest stake in SoftwareONE, amounting to approximately 30.8%. KKR will keep a stake of approximately 15%. The free float (excluding shares under lock-up) is expected to be approximately 24.3%, or 28.0% if the over-allotment option is exercised in full (based on the total issued share capital).
Credit Suisse, J.P. Morgan and UBS Investment Bank are acting as joint global coordinators and joint bookrunners of the IPO, while BNP Paribas, Citi, Deutsche Bank, UniCredit and Zürcher Kantonalbank are acting as joint bookrunners. Rothschild & Co is acting as financial advisor to SoftwareONE.
Business built to deliver profitable growth at scale
As a leading global provider of software and cloud technology solutions, SoftwareONE addresses the commercial, technological and digital transformation challenges companies face amid the growing complexity of technology and the rising strategic significance of digitalization. According to external industry experts, spending for global software and cloud procurement is forecast to grow at a CAGR of 10% and solutions and services at a CAGR of 17% until 2022. With its end-to-end suite of solutions, SoftwareONE is well placed to further capitalize on this underlying market growth.
SoftwareONE's operating model is built to deliver profitable growth at scale based on one of the broadest global footprints in the industry, encompassing local sales capabilities in 90 countries, supported by six regional and three global service delivery centers, and the ability to transact in more than 150 countries. The company enjoys strong relationships with around 65,000 business customers, with strong gross profit retention and a growing share of customers' wallets. SoftwareONE has also built strong relationships with more than 7,500 software and cloud publishers covering the full spectrum of software and cloud spend. Based on its global transaction volume, SoftwareONE estimates that it is Microsoft's largest channel partner globally and the largest partner for Microsoft's fast-growing cloud platform Azure.
Attractive financial profile and outlook
SoftwareONE has a long-standing track record of strong double-digit organic growth. It has delivered gross profit growth continuously each year for the past decade, increasing at an organic CAGR of 29% from 2008 to 2018. Between 2016 and 2018, gross profit increased from CHF 317 million to CHF 409 million, representing a CAGR of 14%. SoftwareONE's adjusted EBITDA margin, 7 rose from 17% in 2016 to 33% in 2018, reflecting scale effects and efficiencies, increasing standardization and automation, and rigorous performance management.
For the combined group including Comparex, gross profit increased at a CAGR of 13% from CHF 571 million in 2016 to CHF 724 million in 2018. Adjusted EBITDA for the combined group increased from CHF 92 million in 2016 to CHF 187 million in 2018, representing a CAGR of 42%. In the same period, the adjusted EBITDA margin for the combined group increased from 16% to 26%. SoftwareONE believes that the superior margins on a SoftwareONE standalone basis illustrate a strong upside potential for the combined group.
Operating free cash flow for the combined group increased from CHF 69 million in 2016 to CHF 166 million in 2018, representing a CAGR of 55%. SoftwareONE has a strong and unlevered balance sheet to support future growth.
Over the mid-term, SoftwareONE targets gross profit growth from sale of Software & Cloud in the high single digits and gross profit growth from Solutions & Services in the high teens, resulting in targeted double-digit gross profit growth for the group. In addition, SoftwareONE targets an adjusted EBITDA margin approaching 35% over the mid-term9, with adjusted EBITDA growth in excess of the targeted gross profit growth.
Furthermore, based on its strong balance sheet and cash flow generation, SoftwareONE intends to pursue a progressive dividend policy over the mid-term, with a target pay-out ratio in the range of 30% to 50% of the profit for the year.
The Executive Board, which is responsible for the executive management of the company, includes Dieter Schlosser, CEO, Hans Grüter, CFO, Alex Alexandrov, COO, and Neil Lomax, President of Sales.
Dieter Schlosser, CEO of SoftwareONE: "I am very proud of our team, whose commitment over the past 20 years has made SoftwareONE so successful and ready for the public market. We look forward to this next exciting stage of our history as we seek to create further significant value for our customers and our new and existing shareholders."
Board of Directors strengthened with three additional independent members
SoftwareONE's Board of Directors, chaired by Daniel von Stockar and comprising non-executive directors only, will have four independent members: These include Peter Kurer, a member of the Board since 2013 and the company's Lead Independent Director, as well as three new members elected at an Extraordinary General Meeting on 10 October 2019 with effect from the first day of trading:
- José Alberto Duarte, Chief Executive Officer of Infovista, a France-based leader in modern network performance;
- Timo Ihamuotila, Chief Financial Officer and a member of the Group Executive Committee of ABB Group;
- Marie-Pierre Rogers, who leads Spencer Stuart's board practice in Switzerland and is a member of its global industrial and technology, media & telecommunications practices.
Marie-Pierre Rogers will chair the Board's Nomination & Compensation Committee, while Timo Ihamuotila will chair the Audit Committee of the Board of Directors.
Daniel von Stockar, Chairman of SoftwareONE: "I am very pleased about the election of Marie-Pierre, José Alberto and Timo as additional independent members of the Board of Directors. With their broad leadership experience and complementary areas of expertise, I am convinced they will add great value to the Board as we continue our journey as a listed firm."
Key IPO data and indicative IPO timetable
Janine Hensen, Corporate Communications Manager
SoftwareONE is a leading global provider of end-to-end software and cloud technology solutions, headquartered in Switzerland. With capabilities across the entire value chain, it helps companies of all sizes design and implement their technology strategy, buy the right software and cloud solutions at the right price, and manage and optimize their software estate. Its offerings are connected by PyraCloud, SoftwareONE's proprietary digital platform, that provides customers with data-driven, actionable intelligence and helps them manage and optimize their software and cloud spend. With around 5,300 employees and sales and service delivery capabilities in 90 countries, SoftwareONE provides around 65,000 business customers with software and cloud solutions from over 7,500 publishers. For more information, please visit SoftwareONE.com.
SoftwareONE Holding AG, Riedenmatt 4, CH-6370 Stans
This document is not an offer to sell or a solicitation of offers to purchase or subscribe for shares. This document is not a prospectus within the meaning of Article 652a of the Swiss Code of Obligations, nor is it a listing prospectus as defined in the listing rules of the SIX Swiss Exchange AG or a prospectus under any other applicable laws. Copies of this document may not be sent to jurisdictions, or distributed in or sent from jurisdictions, in which this is barred or prohibited by law. The information contained herein shall not constitute an offer to sell or the solicitation of an offer to buy, in any jurisdiction in which such offer or solicitation would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any jurisdiction. A decision to invest in securities of SoftwareONE Holding AG should be based exclusively on the issue and listing prospectus published by SoftwareONE Holding AG for such purpose. Copies of such issue and listing prospectus (and any supplements thereto) are available free of charge from SoftwareONE Holding AG, Investor Relations, Bahnhofplatz 1d, 8304 Wallisellen, Switzerland (email: firstname.lastname@example.org), Credit Suisse AG, Zurich, Switzerland (email: email@example.com) and UBS AG, Swiss Prospectus Switzerland, P.O. Box, CH-8098 Zurich, Switzerland (voicemail: +41 44 239 4703); fax: +41 44 239 6914; email: firstname.lastname@example.org). Investors are furthermore advised to consult their bank or financial adviser before making any investment decision.
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Information to Distributors: 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 by each [Manager] established in the EEA, which has determined that the 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 "Target Market Assessment"). Notwithstanding the Target Market Assessment, Distributors should note that: the price of the Shares may decline and investors could lose all or part of their investment; the Shares offer no guaranteed income and no capital protection; and an investment in the 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.
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