WeTransfer sponsor to revisit exit plans later this year

Owner Highland Capital Partners is keen to move ahead with an exit of the Netherlands-based online file transfer firm after shelving plans for an IPO in January due to market volatility, three sources familiar with the situation said.

A process could take place in 2H22, given that preparations over an exit have already been made prior to the original IPO attempt, one of the sources said.

The prospect of a slowdown in M&A activity in the upcoming third quarter could affect the sponsor's decision to initiate a private sale process sooner, one of the sources said, pointing to private equity as the most likely potential suitors.

With the IPO market appearing difficult, a private sale becomes a viable alternative for the business, two sources suggested. Given the depressed global technology stock valuations in recent months, a sale would offer a better exit route for the company, added another source.

WeTransfer is also likely to be down the pecking order in the next IPO window as it faces competition from larger transactions being prepared, one source said. The company is not on advisors' radar as a near-term candidate now given its relative size, another source added.

Mid-cap companies like WeTransfer will struggle to compete in the IPO market with any prospective deal needing to be a "seriously hot asset" to successfully come to market at the moment, said one of the sources. "This clearly isn't a good window for a lot of technology at the moment aside from the names which are very entrenched in their industry," an additional source familiar with the situation said.

A revival of a WeTransfer IPO cannot be entirely ruled out this year, given the return of some stability in the market in recent months, one of the sources countered. "If you would have asked anyone a month ago IPOs before the summer looked unlikely, now it is possible," they added.

WeTransfer's IPO, which was reportedly valuing it at roughly EUR 1bn, was halted at the beginning of the year as the prospect of rising global interest rates battered equity portfolios. "WeTransfer had high level of confidence, but also timing for a tech IPO was ultimately terrible," one of the sources said.

The IPO was covered on the base deal size at the time of the cancellation and several large institutional investors remained in the book, this news service previously reported. However, sources at the time said the deal was cancelled because the book was not deemed strong enough to price the transaction.

Bank of America and Morgan Stanley were global coordinators for the IPO, while ABN Amro and Barclays were bookrunners, as reported. Given the amount of work done around the IPO, it is likely that they will be retained for the new process, one of the sources said.

Founded in 2009, Amsterdam-based WeTransfer makes most of its revenue from advertisement on its file-sharing service and through paid-for tools to help create presentations, share and organise ideas.

According to company financials, revenue for the period ending in September 2021 was EUR 72m, up from EUR 44m the previous year. Gross profit was EUR 62.4m up from EUR 35.8m. EBITDA stood at EUR 21.3m, up from EUR 12.2m.

WeTransfer and Highland Capital declined to comment.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Send to  

• Topics
• Exits
• Benelux
• Technology
• Highland Capital Partners
• Netherlands
• Mergermarket
• IPO