Pagero Acquisition: Key Details, Impact, and What Comes Next

Thomson Reuters' acquisition of Pagero, valued at approximately USD 800 million, marks a significant step in the e-invoicing and compliance solutions industry. This strategic move enhances Thomson Reuters' portfolio, offering substantial growth opportunities and reinforcing its position in the global market. The integration of Pagero's capabilities is expected to benefit customers with improved compliance and workflow automation.

What Is Pagero?

Founded in 2000, Pagero specializes in automated business transactions, offering solutions such as e-invoicing, AP and AR automation, and compliance services. Its unique selling points include global compliance capabilities in over 75 countries, extensive network reach, and seamless integration with various ERP systems. Pagero's commitment to environmental sustainability and year-round compliance support further distinguish it in the market.

Who Acquired Pagero?

Thomson Reuters is a global content and technology company that plays a pivotal role in various industries by providing professionals with the intelligence, technology, and human expertise they need. Its key products and services include legal solutions, tax and accounting services, trade and supply chain management, risk and fraud prevention, and news and media offerings. Recognized for its authoritative content and innovative technology, Thomson Reuters holds a leading market position, empowering customers to navigate complex challenges efficiently.

When Was Pagero Acquired?

Thomson Reuters completed the acquisition of Pagero on February 26, 2024. This acquisition aligns with the increasing global adoption of e-invoicing regulations and the growing demand for automated, secure, and compliant business transaction solutions. The timing is significant as it follows a series of strategic acquisitions by Thomson Reuters, enhancing its portfolio and positioning it to capitalize on industry trends towards digital tax regulation and seamless ERP integration.

Why Was Pagero Acquired?

• Market Expansion: The acquisition of Pagero is a strategic move by Thomson Reuters to expand its market presence in the e-invoicing and indirect tax solutions sector. This acquisition, part of a broader strategy involving six acquisitions since January 2023, aims to enhance Thomson Reuters' portfolio and provide significant growth opportunities by integrating Pagero's solutions. The merger is expected to offer an enhanced and expanded product portfolio to the partner and customer ecosystems, ensuring new avenues for growth and collaboration.
• Technology Integration: Pagero's Smart Business Network, which connects 90,000 customers to a platform reaching 14 million companies, will be integrated with Thomson Reuters' ONESOURCE suite. This integration will bring enhanced compliance, end-to-end workflow automation, and global scale. The network is compliant with e-invoicing mandates in over 75 countries, providing a robust technological foundation for future growth. The combined expertise aims to leverage digitalization to manage operational inefficiencies, cross-border operations, and multinational regulatory compliance.
• Competitive Advantage: The acquisition provides Thomson Reuters with a competitive advantage by combining Pagero's advanced e-invoicing solutions with its own suite of products. This strategic fit allows Thomson Reuters to offer a comprehensive, globally connected suite of e-invoicing capabilities, enhancing its value proposition to customers. The integration of Pagero's technology and expertise is expected to drive significant customer benefits and strengthen Thomson Reuters' market position. Additionally, Pagero's proven track record of double-digit revenue growth and high profitability in its scaled markets provides a pathway to robust overall profitability for Thomson Reuters in the next few years.

Acquisition Terms

• Acquisition Price: Approximately USD 800 million / SEK 8.1 billion.
• Payment Method: The exact payment method was not publicly disclosed.
• Key Conditions or Agreements:
  • The acquisition builds on a successful strategic partnership between Thomson Reuters and Pagero.
  • Thomson Reuters plans a thoughtful and gradual integration of Pagero.
  • Pagero’s CEO, Bengt Nilsson, will report to Thomson Reuters' CEO, Steve Hasker.
  • The financial performance of Pagero will be reported into Thomson Reuters Corporates segment.
  • Thomson Reuters is committed to ensuring continuity for customers, partners, and colleagues during and after the integration.
  • The acquisition aims to leverage Pagero’s brand and network to deliver additional compliance offerings across various parts of Thomson Reuters' portfolio, including Global Trade Management, Supply Chain, and Vendor Risk.
  • The offer has been declared unconditional, meaning the conditions for completion of the Offer have ceased to apply.
  • The acceptance period for the Offer expires on 9 February 2024, with settlement expected to be initiated on or around 16 February 2024.
  • Thomson Reuters holds and controls approximately 53.81% of shares and votes in Pagero as of the announcement date.
  • The independent bid committee of Pagero's board of directors unanimously recommends all shareholders of Pagero accept the Revised Offer.
  • The Offer is not subject to any financing contingency.

Impact on Pagero

The acquisition of Pagero by Thomson Reuters has led to several operational and managerial changes. Pagero’s CEO, Bengt Nilsson, now reports directly to Thomson Reuters' CEO, Steve Hasker, ensuring a seamless integration of leadership. The financial performance of Pagero will be reported within Thomson Reuters' Corporates segment, reflecting a strategic alignment of business operations. Despite these changes, existing contracts, services, and support channels remain unchanged, ensuring continuity for customers and partners. The integration process is designed to be gradual, allowing both companies to leverage their combined strengths effectively.

Product offerings and services are set to benefit significantly from the acquisition. Pagero’s Smart Business Network will be integrated with Thomson Reuters' ONESOURCE suite, enhancing compliance, workflow automation, and global scalability. This integration aims to provide customers with a more robust and comprehensive suite of e-invoicing and indirect tax solutions. Employee reactions have been positive, with leadership expressing excitement about the merger's potential. Customers are reassured that their existing services will continue uninterrupted, with the added benefit of enhanced compliance and automation capabilities.

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