SoftwareOne and Crayon: Combining two leading global providers of software and cloud solutions

19 Dec 2024 07:00 CET

Tender offer to be launched for the acquisition of all outstanding Crayon shares
by SoftwareOne

19 December 2024

SoftwareOne Holding AG and Crayon Group Holding ASA, two leading global
providers of software and cloud solutions, today announced that they have agreed
to combine. To this end, SoftwareOne will launch a recommended voluntary stock
and cash offer to acquire all outstanding shares in Crayon. With total revenue
of approximately CHF 1.6 billion, presence across 70+ countries and around
13,000 employees, the combined company will be excellently positioned as a
preferred partner to both customers and vendors globally, driving additional
growth and significant value creation for shareholders.

Key transaction highlights
 Crayon shareholders to be offered 0.8233 new shares in SoftwareOne and NOK 69
in cash for each Crayon share, implying an offer value of NOK 144 per share
based on SoftwareOne’s undisturbed share price(1)
 Offer based on a valuation of Crayon at NOK 172.5 per share, representing a
premium of 36%, while SoftwareOne is valued at CHF 10 per share in the share
exchange component, a premium of 38%, both compared to the respective
undisturbed share prices
 Accelerated growth and improved profitability driven by run-rate cost
synergies of CHF 80-100 million to be reached within 18 months of completion,
incremental to SoftwareOne’s previously announced cost savings of over CHF 50
million, as well as significant revenue synergies driven by high business
complementarity
 Highly value accretive for shareholders with EPS accretion around 25% , and
over 40% excluding implementation costs by 2026
 Full support of the transaction from the founding shareholders of SoftwareOne
and Crayon, holding 29% and 5% of the share capital, respectively, with the
SoftwareOne founding shareholders having pre-committed to vote in favour of the
necessary resolutions at a SoftwareOne shareholders’ meeting and the Crayon
founding shareholders having pre-committed to tender their shares in the offer
 Completion of the transaction expected in Q3 2025, subject to customary
conditions, including a minimum acceptance of the offer of at least 90% of
Crayon shares on a fully diluted basis, as well as SoftwareOne shareholder
approval and regulatory approvals
 Crayon to appoint two nominees to be proposed as additional members of the
SoftwareOne Board of Directors; CEOs Raphael Erb and Melissa Mulholland to be
named as Co-Chief Executive Officers of the combined company

Compelling strategic rationale
The transaction is based on the combination of two leading global software and
cloud solutions providers, with a complementary geographical footprint, customer
base and offering.
The combined company will be uniquely positioned to capitalise on the USD 150
billion addressable market, which is growing at ‘mid-teens’ driven by
mega-trends, including public cloud adoption and increased focus on managing
cloud spend, data & AI and security. Both companies have a customer-centric
business model and an aligned go-to-market approach. By joining forces,
SoftwareOne and Crayon will create a larger marketplace and enhance their
differentiated services offering. Their deep relationships with the hyperscalers
will be further reinforced, with increased importance to vendors given combined
scale and ability to offer global access across customer segments. Furthermore,
SoftwareOne’s scalable global and local delivery model and transactional
platform will support approximately CHF 16 billion of billings in total.

The combination delivers value creation through substantial revenue and cost
synergies. Run-rate cost synergies of CHF 80-100 million within 18 months of
completion have been identified, incremental to SoftwareOne’s previously
announced cost savings of over CHF 50 million. They will be achieved through
scale and efficiency across currently sub-scale local operations, integration of
offices and functions, a scalable transactional platform with shared service
centers, increased sales efficiency and improved utilisation of the combined
services delivery network. Implementation costs are expected to be within the
same range as the run-rate cost synergies.

In addition, significant revenue synergies have been identified, including
expanded customer access, in particular to larger customer accounts, based on
combined capabilities, certifications and authorisations. Significant cross- and
upsell opportunities are also expected from the enhanced services offering.
Furthermore, the company will be in a position to increase coverage of the SME
segment by leveraging both SoftwareOne’s digital sales hubs and Crayon’s channel
platform.

Daniel von Stockar, Founding Shareholder and Chairman of the Board of Directors
of SoftwareOne, said “We are excited to announce a new chapter for SoftwareOne
and Crayon. This is a unique opportunity to bring together our complementary
businesses, highly qualified teams and shared values based on entrepreneurial
spirit. The business combination sets the stage for any ownership scenario, and
we will now focus our efforts on completing the transaction successfully and
integration. The compelling strategic rationale and substantial synergy
potential are set to create significant value for our shareholders, including
those joining from Crayon.”

“We see a fast-growing market opportunity as organisations continue to drive
digital transformation,” added Raphael Erb, Chief Executive Officer of
SoftwareOne. “Together with Crayon, we will have a broad global presence with
extensive local reach, strong hyperscaler partnerships, including with
Microsoft, and enhanced service offerings to meet customer needs. Building on
our strong value-based foundations as leading global providers of software and
cloud solutions, we will be very well positioned to drive accelerated growth and
improved profitability.”

Rune Syversen, Founding Shareholder and Chairman of the Board of Directors of
Crayon, said “When we established Crayon in 2002, we had four goals: to be the
customer’s trusted advisor, to deliver with quality, lead with integrity and
recruit the best people. Twenty-two years later, delivering on these goals has
been fundamental to our success in becoming a global leader in IT and tech
services. Combining Crayon and SoftwareOne will create an even stronger global
player as we represent complementary businesses with substantial synergy and
profitable growth potential that will generate significant value for our
shareholders and employees.”

“By combining the strengths of Crayon and SoftwareOne, we are in a unique
position to grow our global footprint and deliver exceptional value to our
partners and customers as well as capitalise on new market opportunities. Our
strong hyperscaler partnerships, including with Microsoft, will give us a
strengthened services offering that will meet future customer needs,” said
Melissa Mulholland, CEO of Crayon. “I look forward to working with the
SoftwareOne team, and my main priority is to ensure that our strong
entrepreneurial and people-first culture remains the driving force in building
our future together.”

“SoftwareOne and Crayon have been strategic channel partners for Microsoft, and
we are grateful for the work both companies have done to serve our joint
customers over the years,” said Judson Althoff, Executive Vice President and
Chief Commercial Officer of Microsoft. “As these companies come together, I’m
excited to see the added value it will bring customers such as broader
geographical coverage and enhanced service offerings to support their business
transformation needs.”

Recommended voluntary offer to Crayon shareholders
In view of the transaction, SoftwareOne will make a voluntary offer to acquire
all outstanding shares in Crayon pursuant to the Norwegian Securities Trading
Act. The shareholders of Crayon will receive 0.8233 new shares in SoftwareOne
and NOK 69 in cash for each share in Crayon. The implied offer value is NOK 144
per Crayon share, based on SoftwareOne’s undisturbed share price . This
represents an overall premium to Crayon shareholders of 13% compared to the
undisturbed share price.

The offer is based on an agreed valuation of Crayon at NOK 172.5 per share,
which represents a 36% premium to the undisturbed share price, with a
consideration of 40% cash and 60% shares. The share component assumes an
exchange ratio based on an agreed valuation of SoftwareOne at CHF 10 per share,
representing a 38% premium to the undisturbed share price.

The Board of Directors of Crayon has unanimously resolved that it will recommend
Crayon shareholders to accept the offer. Crayon Group Board recommendation
attached in this release. In addition, the founding shareholders of Crayon,
holding 5% of Crayon’s share capital, have pre-committed to tender their shares
in the offer and under-taken a 12-month lock-up on their shares from the time of
completion of the transaction. SoftwareOne currently holds 1.9% of Crayon’s
share capital.

Launch of the offer is subject to the following conditions being satisfied: (a)
the pre-acceptances shall remain valid and in full force; (b) absence of a
material adverse change pertaining to Crayon; (c) the final approval of a
combined offer document and prospectus by the Oslo Stock Exchange and the
Financial Supervisory Authority of Norway, as applicable; (d) the Board of
Directors of Crayon’s recommendation of the offer shall not have been withdrawn,
modified or amended; (e) SoftwareOne having underwritten a warranty and
indemnity insurance; and (f) Crayon shall in all material respects have complied
with its obligations under the transaction agreement entered into between the
parties on 19 December 2024, and there shall otherwise have been no material
breach of the transaction agreement by Crayon which entitles SoftwareOne to
terminate the transaction agreement pursuant to its terms.

The issuance of up to 72 million new SoftwareOne shares to the accepting Crayon
shareholders, representing up to 32% of SoftwareOne’s new total share capital,
will require the approval by SoftwareOne shareholders. The founding shareholders
of SoftwareOne, including Daniel von Stockar, René Gilli and B. Curti Holding
AG/Curti AG, together holding 29% of SoftwareOne’s share capital, have
pre-committed to vote in favour of such resolution at a shareholders’ meeting of
SoftwareOne.

The companies will explore the possibility of carrying out a dual listing of the
consideration shares on the Oslo Stock Exchange. Such a dual listing will be
subject to regulatory approvals by inter alia FINMA and the Oslo Stock Exchange.
It is therefore uncertain whether a dual listing will be possible.
Completion of the offer is expected in Q3 2025 and is subject to customary
conditions, including a minimum acceptance of the offer of at least 90% of the
Crayon shares on a fully diluted basis, as well as regulatory approvals.

The offer is not subject to any due diligence or financing condition. The
complete details of the offer, including all terms and conditions, will be
included in the combined offer document and prospectus to be distributed to
Crayon shareholders following approval by the Oslo Stock Exchange and by the
Financial Supervisory Authority of Norway.

Financial impact and financing
On an indicative basis, the combined company generated approximately CHF 1,595
million in revenue over the last twelve months to 30 September 2024, with
adjusted EBITDA of approximately CHF 334 million excluding synergies.
EPS accretion is expected to be around 25%, including implementation costs and
phased synergies, and over 40% excluding implementation costs by 2026.

The transaction will be financed by investment grade bridge facilities of
approximately CHF 700 million to fund the cash consideration and refinance
Crayon’s existing debt. Following the transaction, SoftwareOne expects proforma
net debt / adjusted EBITDA (including synergies and implementation costs) to be
below 2.0x as at 31 December 2025.
Based on healthy cash generation of the combined company, SoftwareOne expects to
maintain its current dividend policy, with a pay-out ratio of 30-50% of adjusted
net profit, following completion of the transaction.

Corporate governance
The transaction is unanimously supported by the Boards of Directors of both
companies.
The parties have agreed that, as part of the transaction, Crayon will appoint
two nominees to be proposed as additional members of the Board of Directors of
SoftwareOne. The current CEOs, Raphael Erb and Melissa Mulholland, will be
Co-Chief Executive Officers of the combined company.

The combined company will have its legal domicile in Stans, Switzerland.

Update from the SoftwareOne Board of Directors
The Board of Directors of SoftwareOne is convinced that the business combination
with Crayon represents a significant value creation opportunity for
shareholders. The company will therefore now focus its efforts on the successful
completion of the transaction and integration. The Board does not exclude
considering private ownership at a later stage, if in the best interest of the
company and its shareholders. SoftwareOne will update the market as and when
required.


Indicative timeline

March 2025 Publication of Norwegian takeover offer prospectus
March 2025 / Q2 2025 Tender offer period
Spring 2025 SoftwareOne shareholders’ meeting for approval of issuance of new
shares to Crayon shareholders
Q3 2025 Completion of transaction, subject to receipt of required regulatory
approvals

Advisors
Jefferies is acting as sole financial advisor to SoftwareOne. Walder Wyss is
acting as legal advisor to SoftwareOne, with Wikborg Rein advising as to
Norwegian law and Freshfields as to regulatory matters. ABG Sundal Collier and
Houlihan Lokey are acting as financial advisors and AGP Advokater is acting as
legal advisor to Crayon.

PRESENTATION FOR INVESTORS, ANALYSTS AND THE MEDIA
An audiocast for investors, analysts and the media with Raphael Erb, CEO
SoftwareOne, Melissa Mulholland, CEO Crayon, and Rodolfo Savitzky, CFO
SoftwareOne, will be held today at 9.00 CET and may be joined via the link
Webcast. The presentation materials are available here.
If you wish to actively participate in the Q&A session or are unable to join via
the audiocast, you may call the following numbers, 10-15 minutes before the
conference start:
Switzerland / Europe: +41 22 595 47 28
United Kingdom: +44 1 212 81 80 04
United States: +1 718 705 87 96
The audiocast will be archived and a digital playback will be available after
the event here.

CONTACT
SoftwareOne
Anna Engvall, Investor Relations
Tel. +41 44 832 41 37, anna.engvall@softwareone.com
FGS Global, Media Relations
Tel. +41 44 562 14 99, press.softwareone@fgsglobal.com
Crayon
Kjell Arne Hansen, Investor Relations
Tel. +47 950 40 372, kjellarne.hansen@crayon.com

ABOUT SOFTWAREONE
SoftwareOne is a leading global software and cloud solutions provider that is
redefining how organisations build, buy and manage everything in the cloud. By
helping clients to migrate and modernize their workloads and applications – and
in parallel, to navigate and optimise the resulting software and cloud changes –
SoftwareOne unlocks the value of technology. The company's ~9,300 employees are
driven to deliver a portfolio of 7,500 software brands with a presence in over
60 countries. Headquartered in Switzerland, SoftwareOne is listed on the SIX
Swiss Exchange under the ticker symbol SWON. Visit us at www.softwareone.com
SoftwareOne Holding AG, Riedenmatt 4, CH-6370 Stans
ABOUT CRAYON
Headquartered in Oslo, Norway, Crayon operates across 45 countries with a
dedicated team of more than 4,000 professionals. It leads the charge in IT
optimization and innovation as a trusted advisor in strategic software
acquisition, continual IT estate optimization, and maximizing returns on
investments in cloud, data, and AI. Crayon is a customer-centric innovation and
IT services company that creates value for companies to thrive today, and scale
for tomorrow.
Originally focused on software procurement and asset management, Crayon has
evolved to become a trusted advisor in strategic software acquisition, continual
IT estate optimization, and maximising returns on investments in cloud, data,
and AI.
IMPORTANT INFORMATION
The voluntary tender offer (the "Offer") and the distribution of this
announcement and other information in connection with the Offer may be
restricted by law in certain jurisdictions. When published, the combined offer
document and prospectus (the "Offer Document") and related acceptance forms will
not and may not be distributed, forwarded or transmitted into or within any
jurisdiction where prohibited by applicable law, including, without limitation,
Canada, Australia, New Zealand, South Africa, Hong Kong, South Korea and Japan,
or any other jurisdiction in which such distribution, forwarding or transmittal
would be unlawful. SoftwareOne Holding AG (the "Offeror") does not assume any
responsibility in the event there is a violation by any person of such
restrictions. Persons in the United States should review "Notice to U.S.
shareholders" below. Persons into whose possession this announcement or any
other information regarding the Offer should come are required to inform
themselves about and to observe any such restrictions.
This announcement is for informational purposes only and is not a tender offer
document or a prospectus and, as such, is not intended to constitute or form any
part of an offer or the solicitation of an offer to purchase, otherwise acquire,
subscribe for, sell or otherwise dispose of any securities or the solicitation
of any vote or approval in any jurisdiction, pursuant to the Offer or otherwise.
The Offer is only made on the basis of the Offer Document to be approved by the
Oslo Stock Exchange and the Financial Supervisory Authority of Norway, and can
only be accepted pursuant to the terms of such document. Offers will not be made
directly or indirectly in any jurisdiction where either an offer or
participation therein is prohibited by applicable law or where any tender offer
document, prospectus or registration or other requirements would apply in
addition to those undertaken in Norway (and other member states of the European
Economic Area, as applicable).
Notice to U.S. shareholders
This announcement does not constitute an offer, or solicitation of an offer, to
sell, purchase or subscribe for any securities. The new SoftwareOne shares
offered in the share exchange component (the "Consideration Shares") referred to
in this release have not been and will not be registered under the United States
Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state
securities laws and may not be offered or sold within the United States or to
U.S. Persons unless registered under the U.S. Securities Act and applicable
state securities laws or an exemption from such registration is available. The
information contained in this announcement is for informational purposes only
and does not purport to be full or complete. The Offeror does not intend to
conduct a public offering in the United States. Copies of this announcement are
not being, and should not be, distributed in or sent into the United States.
Forward-looking statements
This announcement, verbal statements made regarding the Offer and other
information published by the Offeror may contain certain statements about Crayon
and SoftwareOne that are or may be forward-looking statements. These
forward-looking statements can be identified by the fact that they do not relate
only to historical or current facts. Forward-looking statements sometimes use
words such as "may", "will", "seek", "continue", "aim", "anticipate", "target",
"expect", "estimate", "intend", "plan", "goal", "believe" or other words of
similar meaning. Examples of forward-looking statements include, among others,
statements regarding the Crayon's and SoftwareOne's future financial and market
position, business strategy, leverage, payment of dividends and plans and
objectives for future operations and other statements that are not historical
fact. By their nature, forward-looking statements involve risk and uncertainty
because they relate to future events and circumstances, including, but not
limited to, local and global economic and business conditions, the effects of
volatility in credit markets, market-related risks such as changes in interest
rates and exchange rates, effects of changes in valuation of credit market
exposures, changes in valuation of issued notes, the policies and actions of
governmental and regulatory authorities, changes in legislation, the further
development of standards and interpretations under International Financial
Reporting Standards ("IFRS") applicable to past, current and future periods,
evolving practices with regard to the interpretation and application of
standards under IFRS, the outcome of pending and future litigations, the success
of future acquisitions and other strategic transactions and the impact of
competition - a number of such factors being beyond the control of Crayon and
SoftwareOne. As a result, actual future results may differ materially from the
plans, goals, and expectations set forth in these forward-looking statements.
Any forward-looking statements made herein speak only as of the date they are
made. The Offeror disclaims any obligation or undertaking to release publicly
any updates or revisions to any forward-looking statements contained in this
announcement to reflect any change in the Offeror's expectations with regard
thereto or any change in events, conditions or circumstances on which any such
statement is based.

This information is considered to be inside information pursuant to the EU
Market Abuse Regulation (MAR) and is subject to the disclosure requirements
pursuant to MAR article 17 and section 5 -12 of the Norwegian Securities Trading
Act. This stock exchange release was published by Kjell Arne Hansen, Head of
Investor Relation & Corporate Finance, 19 December 2024 at 07:00] CET

More information:
Access the news on Oslo Bors NewsWeb site

635140_Board Recommendation_.pdf
635140_Transaction announcement.pdf
635140_Transaction presentation.pdf