OSLO: Mercell Holding AS, through a wholly-owned subsidiary, signed a binding agreement to acquire 100 percent of the shares in Visma Commerce AB and Visma Commerce AS (jointly “Visma Commerce“) from Visma AS, for an enterprise value of SEK 2.0 billion.

The acquisition represents a major step forward in Mercell’s strategy to become the leading European provider of public e-tendering and e-procurement software. The transaction is expected to be closed during the fourth quarter of 2020.

The acquisition will be financed through a share issue of NOK 1,300 million that has been fully underwritten by a consortium consisting primarily of large existing shareholders in the Company, and a fully underwritten senior secured bond issue of SEK 1,100 million. The purchase price will be paid in cash upon completion.

The combined businesses will together form one of the leading providers of public e-tendering solutions in Europe with an annual recurring revenue (ARR) of NOK 534 million as of third quarter of 2020, with pro forma revenue of NOK 526 million and adjusted pro forma EBITDA of NOK 154 million for the last twelve months up to and including the third quarter of 2020.

CEO of Mercell, Terje Wibe commented, “Through this acquisition Mercell establishes a strong position in the Swedish market and a stronger platform for European expansion. We are two highly complementary businesses in terms of customers, products and market presence, and will provide additional customer value through the broadening of our reach and distribution. We significantly strengthen our offering for cross border tender processes, and increased economies of scale will allow us to further accelerate innovation and product development.”

Visma Commerce is the Swedish market leading public procurement information and monitoring software. The company was founded in 1999 and has been a part of Visma since 2010.

The Transaction includes the two cloud-based software divisions Opic and TendSign, catering to suppliers and buyers in the pre-award segment, respectively.

ARR amounted to NOK 196 million at the end of the third quarter of 2020, with revenue of NOK 198 million and adjusted EBITDA of NOK 98 million, corresponding to an EBITDA-margin of 49 per cent for the last twelve months up to and including the third quarter of 2020. The post-award solution, Proceedo, will be carved out and is not a part of the Transaction (not included in the financial figures presented above).

Mercell is a leading provider of public e-tendering services in Europe. Mercell’s software solutions enable buyers to comply with EU regulations which requires that all public tenders above certain thresholds are published through e-tendering platforms. In addition, the solutions ensure that suppliers are notified of all relevant tenders. Mercell has recently expanded its offering through M&A to include online procurement solutions to public and private customers.

CFO of Mercell, Fredrik Eeg commented, “We are now establishing an efficient platform for further growth in Europe, and we will be able to provide an even better offering to our customers. Near term annual synergies are estimated to be approximately NOK 20 million, and long-term annual synergies are expected to exceed NOK 100 million”.

After completion of the Transaction, Mercell will operate as a customer-focused and technology-driven provider of SaaS solutions for the European market. Mercell will have close to 420 employees and a client base of approximately 29,000 customers.

Partner at Viking Venture and Chairman of the board at Mercell, Joar Welde commented, “Strengthening Mercell’s international footprint has been the board’s strategy from the beginning. The acquisition of Visma Commerce is an important step in becoming the leading provider of public e-tendering and e-procurement software in Europe.”

Mercell will finance the Transaction through a combination of new equity and a senior secured bond issue. The senior secured bond will also refinance Mercell’s current outstanding debt. The purchase price will be paid in cash upon completion of the Transaction.

The Company will issue a fully underwritten 5-year senior secured bond of SEK 1,100 million, with floating interest rate and bullet repayment. The bond issue will be launched publicly as part of the Transaction.

The Company also intends, in due course, to launch a private placement of approximately NOK 1.3 billion in new equity, which has been fully underwritten by a consortium consisting primarily of large existing shareholders in the Company. www.mercell.com