Thomson Reuters proposes a $627 million acquisition of Sweden's Pagero

Thomson Reuters has officially put forward a proposition to acquire Pagero, a Swedish company specializing in e-invoicing and tax solutions. The offered amount stands at a noteworthy 6.4 billion crowns (Krona), translating to approximately $627 million. This offer exceeds the preceding bid from U.S. tax technology firm Vertex.

Thompson Reuters is set to pay 40 crowns (Krona) in cash for each Pagero share, representing a premium of 11% over the stock’s closing price on Wednesday, 10 January 2024. In contrast, Vertex had previously tabled an offer of 36 crowns per share.

Pagero was founded in the early 1990s, and it is recognized for its expertise in digitizing and automating accounting processes. The company disclosed that an independent bid committee of its board has switched its recommendation from Vertex’s proposal to favor the superior offer from Thomson Reuters. Although there has been no final decision, the company’s official website still states both offers as active.

According to the financial statements provided on Pagero’s official website (www.pagero.com), the following chart provides the operating cost of Pagero from 2020 to 2021.

According to the above-mentioned figures, Pagero saw revenue of around $34 million in 2020, which rose by 26.87% in 2021, amounting to $43 million, and then further rose by 35.84% to $58 million in 2022. These strong numbers are a testament to the efforts made by the board members of the company, especially Chairman Birger Steen, Vice-Chairman Fredrik vom Hofe, and CEO Bengt Nilsson.

Thompson Reuters has announced that the acceptance period for the proposed acquisition of Pagero is set to commence on 12 January 2024 and conclude on or around 9 February 2024.

Thomson Reuters also emphasized that Pagero’s e-invoicing compliance capabilities would significantly enhance its portfolio of indirect tax offerings.

Thomson Reuters has been active in the mergers and acquisitions space in recent years. Notably, in May 2023, the company’s CFO, Michael Eastwood, shared with Reuters News that they had allocated a substantial $10 billion budget for M&A activities until 2025. Since then, two major acquisitions have been unveiled. The first involved the purchase of Imagen, a Britain-based digital content asset management company, on 28 June 2023, for an undisclosed amount. The second, a notable $650 million deal, brought California-based Casetext into the Thompson Reuters fold on 17 August 2023. Casetext specializes in assisting legal professionals with research, analysis, and document preparation, leveraging generative AI.

Before the acquisition of these two companies, in 2022, Thomson Reuters further expanded its portfolio with the acquisition of SurePrep LLC, a U.S.-based provider of tax automation software and services, for a significant sum of $500 million in cash.

This move underscores Thomson Reuters's commitment to strategic growth and diversification within the dynamic landscape of financial and tax-related services.