FOR RELEASE IN SWITZERLAND - THIS IS A RESTRICTED COMMUNICATION AND YOU MUST NOT FORWARD IT OR ITS CONTENTS TO ANY PERSON TO WHOM FORWARDING THIS COMMUNICATION IS PROHIBITED. NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN.

Media Release

SoftwareONE announces plans to IPO on SIX Swiss Exchange

STANS, Switzerland I 30 September 2019 - SoftwareONE Holding AG, a leading and fast-growing global provider of end-to-end software and cloud technology solutions, today announced its intention to conduct an initial public offering and list its shares on SIX Swiss Exchange in the fourth quarter of 2019, subject to market conditions.

- Founded in 2000 by Daniel von Stockar and Patrick Winter († 2018), SoftwareONE is a leading global provider of software and cloud technology solutions with capabilities across the value chain, helping around 65,000 business customers^[1] design and implement their technology strategy, buy the right software and cloud solutions at the right price, and manage and optimize their software and cloud estates.

- With its end-to-end suite of solutions, SoftwareONE addresses the commercial, technological and digital transformation challenges businesses face amid the growing complexity of technology and the rising strategic significance of digitalization.

- SoftwareONE is a partner of choice for many of the world's largest software publishers, hyper-scalers and software disruptors and enjoys well-established relationships with more than 7,500 software and cloud publishers^[2].

- SoftwareONE has one of the broadest global footprints in its industry with local sales capabilities in 90 countries, supported by regional and global service delivery centers and the ability to transact in more than 150 countries.

- SoftwareONE has an outstanding track record of double-digit profitable organic growth with a gross profit^[3] CAGR of 29% from 2008 to 2018. Including Comparex (acquired effective 31 January 2019), it generated pro forma gross profit of CHF 724 million and pro forma adjusted EBITDA^[4] of CHF 187 million for 2018.

- The planned IPO on SIX Swiss Exchange is a natural next step in SoftwareONE's development, intended to enhance its visibility and global profile. The IPO is expected to consist entirely of secondary shares, with the founding shareholders jointly maintaining the largest stake, while KKR intends to retain a significant interest following the IPO.

- A press conference will take place today at 9:30 am at the Park Hyatt in Zurich.

Daniel von Stockar, Chairman of SoftwareONE: "The planned IPO marks an important milestone in the development of SoftwareONE. I am extremely proud of what our team has achieved since our founding almost 20 years ago. Our clear focus on software and cloud, our truly global reach and our entrepreneurial and customer-oriented spirit have been the cornerstones of our success."

Dieter Schlosser, CEO of SoftwareONE: "As cloud adoption and digital transformation have progressed, we have evolved to become a leading integrated software and cloud solutions provider, empowering thousands of companies to transform. I am very confident that we can continue to capitalize on the business opportunities our attractive and growing markets provide."

SoftwareONE overview: Business built to deliver profitable growth at scale

Founded in 2000, SoftwareONE is a leading global provider of software and cloud technology solutions serving approximately 65,000 business customers of all sizes across a broad range of industries. With around 5,300 employees, it has one of the broadest global footprints in its industry with local sales capabilities in 90 countries, supported by six regional and three global service delivery centers. SoftwareONE's operating model is built to deliver profitable growth at scale while ensuring customer proximity, with the ability to transact in more than 150 countries, and centrally delivered 24/7 customer service in 13 languages.

The company's integrated suite of solutions is organized into two business lines:

In the Software & Cloud business line, SoftwareONE offers its customers access to a comprehensive software and cloud portfolio, drawing on its relationships with more than 7,500 publishers and its purchasing expertise. The company's software catalogue includes leading global software publishers such as Microsoft, Adobe, Oracle, Red Hat, VMware and Symantec, best performing hyper-scalers such as Microsoft Azure and Amazon Web Services, and a growing portfolio of disruptive publishers.

The Solutions & Services business line offers software lifecycle management and technology services. Capabilities include consulting, integration and vendor specific professional services, and managed services to monitor and control software and cloud spend. The technology services portfolio is designed to optimize customer infrastructure environments and spend and includes cloud migration, security, and unified communications and collaboration services.

SoftwareONE's offerings are connected by PyraCloud, its proprietary digital hub, which allows customers to efficiently transact, manage and optimize their software and cloud estate from a single platform offering data-driven, actionable intelligence.

Key strengths

Globally scaled platform benefiting from the secular growth of software and cloud

According to external industry experts, spending for global software and cloud procurement reached CHF 525 billion in 2018 and is forecast to grow at a CAGR of 10% until 2022, while spending for solutions and services reached CHF 31 billion in 2018 and is forecast to grow at a CAGR of 17% in the same period.

SoftwareONE is fully exposed to the secular growth of these markets globally and has a strong track record of outperforming the software and cloud market. SoftwareONE has also significantly grown its solutions and services business in recent years. As technology becomes more significant and complex, businesses of all sizes are confronted with commercial, technology and digital transformation challenges. With its end-to-end suite of solutions, its close publisher relationships, its expertise in complex licensing and its attractive product mix, SoftwareONE is well placed to further capitalize on the ongoing digital transformation trend and underlying market growth.

Strong customer relationships and diversified customer base

SoftwareONE's results-driven, customer-first approach has allowed it to build strong relationships as a trusted adviser to a large global customer base. As a result, it enjoys strong gross profit retention, a growing share of customers' wallets and high customer satisfaction. It also benefits from a well-diversified business mix across geographies, customer types and industries. Large enterprises account for approximately half of the gross profit, with small and medium-size enterprises accounting for the other half^[5]. In the first half of 2019^[6], the DACH region accounted for 34%, the rest of EMEA for 32%, NORAM for 15%, APAC for 11% and LATAM for 8% of gross profit.

A partner of choice for software and cloud publishers globally

SoftwareONE enjoys well-established relationships with more than 7,500 software and cloud publishers covering the full spectrum of software and cloud spend. In particular, the company has a long-standing, strong relationship with Microsoft. 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.^[7] As a globally scaled software and cloud platform with strong value-add offerings, SoftwareONE provides solutions to many of the challenges software publishers face in the distribution of their products.

Proven growth model delivering double-digit gross profit growth and margin expansion

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 in 2016 to CHF 409 million in 2018, representing a CAGR of 14%. Adjusted EBITDA margin^[8] 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^[9] including Comparex (acquired effective 31 January 2019), gross profit of CHF 571 million in 2016 increased at a CAGR of 13% to gross profit of 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^[10] for the combined group increased from CHF 68 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.

Proven M&A expertise supplementing organic growth

SoftwareONE has a strong track record of supplementing organic growth with a strategic approach to M&A and since 2015 has completed a number of acquisitions focused on scale, geographic reach and capabilities. Announced in October 2018 and completed in January 2019, the acquisition of the global software, cloud and IT solutions provider Comparex is expected to yield significant strategic, competitive and financial benefits with targeted gross annual run rate synergies of CHF 60 million on the level of EBITDA from the beginning of 2021.

Customer-first, results-driven culture

In the software and cloud industry, culture is key to attract and retain talent and to gain market share from competitors. SoftwareONE's business success is driven by a highly qualified global workforce that embodies its customer-first, results-driven company culture, its entrepreneurial spirit and its core values of speed, customer focus, employee satisfaction, humbleness, passion, integrity and discipline. Its highly experienced, cohesive global leadership team has consistently delivered profitable growth and has been instrumental in the company's successful strategic repositioning as an end-to-end technology solutions provider and various acquisitions.

CEO Dieter Schlosser: "Building on our key strengths, we have delivered double-digit profitable organic growth for a decade, and we are very confident that we can continue on our successful growth path going forward. Over the mid-term, we target^[11] 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 SoftwareONE. In addition, we target¹¹ an adjusted EBITDA margin approaching 35% over the mid-term, with adjusted EBITDA growth in excess of the targeted gross profit growth."

Current shareholder structure and outline of the planned offer

Founding shareholders Daniel von Stockar, René Gilli and Beat Curti together hold approx. 38% of the shares of SoftwareONE. KKR, a shareholder since 2015, currently holds approx. 21%, and Peruni Holding, the previous owner of Comparex, holds approx. 15%. Management and (current and former) employees hold approx. 10%, and approx. 16% are held by other shareholders and include treasury shares.

The planned IPO on SIX Swiss Exchange is intended to enhance SoftwareONE's visibility and global profile and provide access to the capital market. The IPO is expected to consist entirely of secondary shares from KKR, Peruni Holding, staff and other shareholders. The founding shareholders remain fully committed to the company and will jointly maintain the largest stake, while KKR intends to keep a significant interest following the IPO. The founding shareholders and KKR will also continue to be represented on SoftwareONE's board of directors.

Credit Suisse, J.P. Morgan and UBS Investment Bank are acting as joint global coordinators and joint bookrunners of the planned 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.

Selected historical financials

SoftwareONE (standalone)
(in CHFm unless noted otherwise)	2016	2017	2018	CAGR 2016-18
Gross profit from sale of software and Other revenue	257	272	323	12%
Gross profit from solutions and services	60	72	87	20%
Gross profit	317	344	409	14%
EBITDA[12]	54	78	130	55%
EBITDA margin[13]	17.1%	22.7%	31.7%
Profit for the year	18	40	78	109%
Profit for the year margin[14]	5.6%	11.7%	19.1%

 

Combined group
(in CHFm unless noted otherwise)	2016	2017	2018	CAGR 2016-18
Gross profit from sale of software and Other revenue	438	474	555	13%
Gross profit from solutions and services	134	147	169	12%
Gross profit	571	621	724	13%
Adj. EBITDA	92	120	187	42%
Adj. EBITDA margin	16.2%	19.3%	25.8%
Adj. profit for the year[15]	n/a	n/a	100	n/a
Adj. profit for the year margin[16]	n/a	n/a	13.8%

 

Today's press conference

SoftwareONE management will hold a press conference today at 9:30 am at the Park Hyatt, Beethovenstrasse 21, in Zurich. Pre-registration is not required.
 

CONTACT

SoftwareONE

Janine Hensen, Corporate Communications Manager
Tel. +49 341 2568 171, janine.hensen@softwareone.com

Lemongrass Communications

Karin Rhomberg, +41 44 202 52 65, karin.rhomberg@lemongrass.agency
Andreas Hildenbrand, +41 44 202 52 38, andreas.hildenbrand@lemongrass.agency 

ABOUT SOFTWAREONE

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

DISCLAIMER

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. Investors are furthermore advised to consult their bank or financial adviser before making any investment decision.

Statements made in this publication may include forward-looking statements. These statements may be identified by the fact that they use words such as "anticipate", "estimate", "should", "expect", "guidance", "project", "intend", "plan", "believe", and/or other words and terms of similar meaning in connection with, among other things, any discussion of results of operations, financial condition, liquidity, prospects, growth, strategies or developments in the industry in which SoftwareONE Holding AG operates. Such statements are based on management's current intentions, expectations or beliefs and involve inherent risks, assumptions and uncertainties, including factors that could result in a substantial divergence between actual results, financial situation, development or performance of SoftwareONE Holding AG and those explicitly or implicitly presumed in these statements. Forward-looking statements contained in this media release regarding trends or current activities should not be taken as a representation that such trends or activities will continue in the future. Actual outcomes, results and other future events may differ materially from those expressed or implied by the statements contained herein. Such differences may adversely affect the outcome and financial effects of the plans and events described herein and may result from, among other things, changes in economic, business, competitive, technological, strategic or regulatory factors and other factors affecting the business and operations of SoftwareONE Holding AG. Neither SoftwareONE Holding AG nor any of its affiliates is under any obligation, and each such entity expressly disclaims any such obligation, to update, revise or amend any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on any such forward-looking statements, which speak only as of the date of this media release. It should be noted that past performance is not a guide to future performance.

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.

This announcement is not for distribution, directly or indirectly, in or into the United States (including its territories and dependencies, any state of the United States and the District of Columbia), Canada, Japan, Australia or any jurisdiction into which the same would be unlawful. This announcement does not constitute or form a part of any offer or solicitation to purchase, subscribe for or otherwise acquire securities in the United States, Canada, Japan, Australia or any jurisdiction in which such an offer or solicitation is unlawful. SoftwareONE Holding AG shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public offer of securities in the United States.

The information contained herein does not constitute an offer of securities to the public in the United Kingdom. No prospectus offering securities to the public will be published in the United Kingdom. In the United Kingdom, this document is only being distributed to and is only directed at (i) investment professionals falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), (ii) high net worth entities falling within article 49 of the Order or (iii) other persons to whom it may lawfully be communicated, (all such persons together being referred to as "relevant persons"). The securities are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

This document does not constitute an offer of securities to the public of the securities referred to herein in any member state of the European Economic Area (the "EEA"). Any offer of securities referred to in this document to persons in the EEA will be made pursuant to an exemption under Regulation (EU) 2017/1129 (the "Prospectus Regulation") as implemented in member states of the EEA, from the requirement to produce a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation. Any offer of securities to the public that may be deemed to be made pursuant to this communication in any EEA member state that has implemented the Prospectus Regulation is only addressed to qualified investors in that member state within the meaning of the Prospectus Regulation and such other persons as this document may be addressed on legal grounds. For the purposes of this paragraph, the expression an "offer to the public" in relation to any securities in any member state means the communication in any form and by any means of sufficient information on the terms of the offer and any securities to be offered so as to enable an investor to decide to purchase or subscribe for any securities.

None of Credit Suisse AG, J.P. Morgan Securities plc, UBS AG, Citigroup Global Markets Limited, BNP PARIBAS, Deutsche Bank Aktiengesellschaft, UniCredit Bank AG and Zürcher Kantonalbank or any of their respective affiliates accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement).

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.

The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Offer. Furthermore, it is noted that, notwithstanding the Target Market Assessment, the [Managers] established in the EEA will only procure investors who meet the criteria of professional clients and eligible counterparties. For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Shares. Each distributor is responsible for undertaking its own target market assessment in respect of the Shares and determining appropriate distribution channels.

^[1] Represents the number of unique trading entities in the combined customer databases of SoftwareONE and Comparex, which figure may include an overlap.

^[2] Represents the estimated number of unique trading entities from which SoftwareONE and Comparex purchased software and cloud products since the beginning of 2018.

^[3] Defined as total revenue less cost of software purchased and third-party service delivery costs.

^[4] Adjusted EBITDA represents earnings before net financial items, taxes, depreciation and amortization as adjusted for M&A, integration and IPO-related costs.

^[5] Based on a study conducted by external industry experts.

^[6] Based on H1 2019 gross profit, including 5 months of Comparex.

^[7] Based on the combined results of SoftwareONE and Comparex for the 12 months ended 30 June 2019.

^[8] Defined as adjusted EBITDA as a percentage of gross profit.

^[9] Financial data for the combined group refers to pro forma financial information for FY 2018 and like-for-like financial information for FY 2016 and FY 2017.

^[10] Defined as adjusted EBITDA less capital expenditure.

^[11] On a constant currency basis as of end of August 2019.

^[12] EBITDA represents earnings before net financial items, taxes, depreciation and amortization.

^[13] Defined as EBITDA as a percentage of gross profit.

^[14] Defined as profit for the year as a percentage of gross profit.

^[15] Defined as profit for the year as adjusted for M&A, integration and IPO-related costs.

^[16] Defined as adjusted profit for the year as a percentage of gross profit.