Vertex’s acquisition of Pagero will accelerate the companies’ partnership announced in October 2023 to provide multinational companies with an end-to-end solution to automate business transactions and manage indirect tax, reporting and e-invoicing compliance globally. E-invoicing has quickly become a necessity for businesses transacting in multiple jurisdictions with the rise of real-time and near-real time digital tax reporting government mandates. Pagero provides comprehensive solutions to automate e-invoicing compliance through its Smart Business Network.

Leveraging Pagero’s platform and global network, Vertex will extend its leadership by adding new digital transformation and e-invoicing capabilities to its portfolio to support customers in the rapidly changing, regulatory compliance landscape. The combined platform will help customers seamlessly facilitate the creation, exchange, and clearance of jurisdictionally-compliant e-invoices, enabling companies to reduce friction and other barriers to geographic expansion, and improve efficiency of their compliance and reporting operations.

“Vertex and Pagero have a shared vision to accelerate global commerce and help companies automate and digitize their compliance operations,” noted Vertex CEO David DeStefano. “Since the launch of our commercial partnership, we have seen strong reception from customers and partners. E-invoicing has become one of the fastest growing challenges facing our global enterprise customers, making this transaction a logical next step. We are confident that together, we will create a best-in-class solution for all indirect tax and e-invoicing needs to help customers navigate complex and evolving compliance mandates, expand our international reach, and unlock additional value for shareholders.”

“Vertex has been a great partner in Pagero’s work to address pressing customer needs for best-in-class tax compliance solutions,” said Bengt Nilsson, Pagero’s second largest shareholder and CEO. “With the rapid emergence of new and proposed e-invoicing mandates and the digitization of indirect tax, e-invoicing has quickly become a necessity for businesses trading in multiple global jurisdictions. By combining Vertex and Pagero’s leading technologies, I am convinced we can better support customers while delivering meaningful value for shareholders.”

Strategic and Financial Benefits of the Proposed Acquisition

Vertex believes acquiring Pagero will provide significant benefits to stakeholders of the combined company, including:

• Significantly Expands Market Opportunity: The e-invoicing market is large and growing, driven by legislation and an increasingly complex compliance environment for companies to navigate. By extending its leadership into e-invoicing through Pagero, Vertex expects to expand its market opportunity from $22 billion to nearly $28 billion2 with considerable upside opportunities as the company helps customers navigate evolving compliance mandates globally.

• Advances International Growth Strategy: Today, Pagero supports a network of approximately 14 million companies across 140 countries. The business’ opportunity is rapidly expanding as more than 50 countries have currently adopted or are expected to adopt Continuous Transaction Controls (“CTC”) mandates. To address these requirements, customers are seeking solutions that simplify their returns and reporting processes. Vertex expects to capitalize on this demand by leveraging Pagero’s e-invoicing solutions for existing customers and as an entry point for new customer acquisition.

• In-Demand, Strategically Aligned Solutions to Manage Tax Compliance in the Digital Era: CTC and e-invoicing are key components in streamlining compliance processes and ensuring timely and accurate reporting. Through this transaction, Vertex will create a seamless, end-to-end compliance platform combining indirect tax, periodic filing and reporting and e-invoicing, with a scalable, open business network that will enable continuous compliance and operational efficiencies across the procure-to-pay and order-to-cash processes.

• Meaningful Growth Opportunities: Pagero delivered year over year growth of 35% in its most recent fiscal quarter, and enjoys strong customer retention metrics. The transaction is expected to unlock additional value as the combined company supports customers at more points through their compliance processes globally. Vertex expects that deepening and expanding customer relationships will drive increased revenue growth.

• Enhanced Financial Profile: Vertex expects the acquisition of Pagero to accelerate the Company’s pro-forma top-line growth by nearly 200 basis points, with a near-term path to profit margin expansion. Pagero is expected to be accretive to Vertex’s margins in the second full year after closing, with additional opportunity to increase revenue synergies and cost benefits in the medium to long term.

Vertex has been informed by the independent bid committee of the Board of Directors of Pagero of its resolution to unanimously recommend the shareholders of Pagero to accept the public offer made by Vertex. Vertex has also received irrevocable undertakings to accept the Offer from Pagero’s two largest shareholders - Vålåuggen Invest AB which is controlled by Summa Equity and Greenfield AB and Norelia AB which are both controlled by Pagero’s CEO Bengt Nilsson - in total representing approximately 40.4 percent of the outstanding shares in Pagero.