Highland, HPE Growth-backed WeTransfer announces IPO pricing

Unquote reported WeTrasnfers' intention to float on 13 January 2022. The IPO price range of EUR 17.50-20.50 per share implies a market capitalisation of EUR 629m-716m on a fully diluted basis, according to a statement.

In a statement, the company said the offer period kicked off on 20 January 2022 at 9am CET, and is expected to close on 27 January 2022 at 2pm CET; the first day of trading will be on the 28 January on Amsterdam's Euronext. The offer contains private placement of newly issued shares worth approximately EUR 125m, as well as up to 5.4 million existing shares held by some of the company's shareholders, including the selling shareholders HPE Institutional Fund II and Highland Europe Technology Growth, among others.

According to a statement, the IPO price range includes a total offering of EUR 285m-290m; however, this depends on the final number of shares placed and the issue price, as well as the full use of the overallotment option. Exercising the overallotment option would result in the free float amounting to around 43.5% of the total issued share capital.

Morgan Stanley and BofA Securities are acting as joint global coordinators, and ABN Amro Bank and Barclays Bank are acting as joint bookrunners.

The company noted in a statement that it intends to use some of the anticipated net proceeds to accelerate growth plans, finance its M&A strategy and acquire intellectual property rights, among other assets. The company stated it intends to settle its obligations under its management incentive plan and pay EUR 23.4m to Highland in relation to the conversion of the preference shares A into ordinary shares.

Back in February 2015, Highland 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. The company provides an online transfer service that allows its 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 100m 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. The company reported an adjusted EBITDA margin of EUR 21.3m with cash conversions of 95%. It 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. Recently, global private equity firm TPG raised USD 835m in a USD 9bn IPO, as reported.

HPE Growth Capital did not respond to a request for comment.

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