Highland, HPE Growth's WeTransfer announces intention to float

WeTransfer's offer contains a private placement of newly issued shares of around EUR 160m and existing shares, which are held by some of the company's shareholders, including the selling shareholders, Highland Europe Technology Growth Limited Partnership and HPE Institutional Fund II HoldCo, among others.

Prior to the admission, WeTransfer will be renamed The Creativity Productivity Group NV. According to a press release, the timing, offer and listing are subject to market conditions.

In a press release, the company highlights its intention to use some of the net proceeds for the issue of new shares to support its growth plans, including investment in its marketing to finance acquisitions. Furthermore, the company intends to settle its obligations under the management incentive plan of the company and to pay an amount to Highland in connection with the conversion of the preference shares A into ordinary shares, according to a press release.

Highland, HPE and WeTransfer, as well as certain senior managers of the group, anticipate entering into a customary lock-up arrangement in the underwriting agreement with the underwriters as mentioned below.

Morgan Stanley and BofA Securities will act as joint global coordinators while ABN Amro Bank and Barclays Bank have been appointed as joint bookrunners.

Back in February 2015, Highland Capital led a USD 25m Series A round for WeTransfer; the investment was intended to grow the company's US presence. Highland also supported the bolt-on acquisition of Paper and Paste in 2018, according to Unquote Data. In August 2019, HPE led a EUR 35m Series B funding round for WeTransfer with Highland also participating in the capital raise.

WeTransfer is based in Amsterdam and the US, and was founded in 2009. It is an online transfer service that allows users to share files to enable co-creation. The company also launched a mobile app, Collect, and a sketching tool, Paper. According to LinkedIn, the company employs around 51-200 people. WeTransfer operates across 190 countries and has around 387,000 paying subscribers.

In a press release the company's CEO, Gordon Willoughby, said the company had delivered a revenue compound annual growth rate (CAGR) of 31% from 2018 to 2020, and they expect revenues to exceed EUR 100 million in 2021. Its revenue growth has continued into 2021 with a constant currency revenue growth of 68% year-on-year for the first nine months of 2021 and the company reported an adjusted EBITDA margin of EUR 21.3m with cash conversions of 95%, according to a press release. The company also reported revenues of EUR 72m in the first nine months of last year.

In the first nine months of 2021, European exchanges saw financial sponsor-backed IPOs reach USD 25.3bn in deal value across 41 listings compared to just eight IPOs in the first nine months of 2020, as reported. Elsewhere, IPO plans came to a halt due to market volatility and uncertainty in the UK due to the effects of the pandemic on many sectors; Brewdog and Hawksmoor paused IPO plans in October 2021, as reported.

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