Slide 1: Vertex Offer to Acquire E-Invoicing Leader Pagero
Vertex Offer to Acquire E-Invoicing Leader Pagero DECEMBER 13, 2023 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements 2 Any statements made in this presentation that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. Forward-looking statements include, among other things, statement
Slide 3: Unlocking Compelling Value Creation Opportunities
Unlocking Compelling Value Creation Opportunities 3 Increases addressable market from $22 billion to ~$281 billion, capitalizing on fast growing e-invoicing trends with considerable upside; expands Vertex presence in Office of the CFO software 1. Based on Vertex estimates 2. Continuous Transaction C
Slide 4: Transaction Highlights
Transaction Highlights 4 • Based in Gothenburg, Sweden • Strong revenue growth and strong earnings trajectory to profitability • Provides a smart business network for automated compliant and secure business transactions • Open network with a reach of 14 million companies E-Invoicing and continuous t
Slide 5: Transaction Details
Transaction Details 5 Purchase Price Financing & Governance Pagero Financial Detail and Pro Forma Impact Path to Close • Financed by combination of proceeds from its existing undrawn revolving credit facility and from issuance of a new series of Convertible Preferred Stock in the amount of $500 mill
Slide 6: E-Invoicing Summary Market Dynamics
E-Invoicing Summary Market Dynamics Expansion into e-invoicing furthers Vertex’s ability to provide an end-to-end global compliance solution 6 • In the EU alone, estimates on uncollected VAT are ~€500bn • As accurate tax collection has become much more difficult due to increased regulation complexit
Slide 7: E-Invoicing Represents Significant TAM Expansion
E-Invoicing Represents Significant TAM Expansion 7 International Opportunity Current Vertex TAM Address e-invoicing needs of U.S based companies selling abroad 7 ADDITIONAL OPPORTUNITY Source: Dun & Bradstreet, company data and estimates. Rapid growth driven by legislation and an increasingly comple
Slide 8: Pagero: Expansive Network Connecting Buyers, Sellers, and Governments
8 Source: Company filings and publicly available information. Open Network CTC / E-invoicing AP / AR Automation Transportation Management E-Banking BUYERS E-Procurement Pagero: Expansive Network Connecting Buyers, Sellers, and Governments with Global CTC Mandates SELLERS Governmental infrastructures
Slide 9: Enabling Governments to Close the VAT Gap
Enabling Governments to Close the VAT Gap 9 + Key Activities Description Invoice Origination VAT Determination B2B, B2G, G2B Invoice Transfer VAT Reporting / Archiving Purchase order is received from buyer, and invoice is created from seller’s ERP architecture Tax calculated based on jurisdiction an
Slide 10: Financials
Financials 10 Copyright © 2023 Vertex, Inc. All rights reserved. Proprietary and confidential.
Slide 11: Pagero KPIs Support Attractive Growth Track Record
2019-2022 CAGR = 25% 39 42 54 95 23 28 2019 2020 2021 2022 Q3'22 Q3'23 $28 $32 $45 $58 $51 $71 2019 2020 2021 2022 Q3'22 Q3'23 *Pagero acquired a majority share in GoSocket on August 24, 2021 Source: Company filings. Note: In USD millions unless otherwise stated. Exchange rate conversions based on U
Slide 12: Pro Forma Revenue Growth Acceleration
$141 $165 Q3'22 Q3'23 $463 $556 Q3'22 Q3'23 $412 $485 Q3'22 Q3'23 Pro Forma Revenue Growth Acceleration ($ in millions) Note: In USD millions unless otherwise stated. Exchange rate conversions based on USD / SEK of 10.46 as of December 12, 2023. Source: Company filings. (1) ARR is based on monthly r
Slide 13: Significant Shareholder Value Creation
Significant Shareholder Value Creation 13 + Large and growing high-margin revenue opportunity Projected Efficiencies • Increase wallet share with existing customers • Penetrate a new and rapidly growing customer base as government e-invoicing mandates proliferate • Expanded opportunities with broade
Slide 14: Establishing a Long-Term Partnership with Silver Lake
Establishing a Long-Term Partnership with Silver Lake 14 • Clear endorsement of Pagero acquisition from the global leader in technology investing • Silver Lake to join world-class board of directors • Silver Lake team to support Vertex on key initiatives as an engaged partner • Validates core Vertex
Slide 15: Path to Close
Path to Close 15 The acceptance period of the offer is expected to commence on or around December 15, 2023 and expire on or around January 23, 2024. The offer is subject to certain regulatory approvals, the receipt of valid tenders of more than 90% of Pagero’s shares and customary closing conditions