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February 28, 2019

Talks Collapse Between Basware and Tradeshift

"The value of Basware will be maximised for all shareholders through a combination of Basware with a strategic purchaser or the acquisition of the company by private equity"

By CBR Staff Writer

Talks have collapsed between digital supply chain payments specialist Tradeshift and rival Basware, the latter said today.

Tradeshift had been widely reported to be mounting a bid to acquire the Finnish company, which plays in the same space.

Basware said in a short statement that Tradeshift told the company it will be “unable to proceed given conditions in the capital markets.”

Basware’s majority shareholder, London-based alternative asset manager Arrowgrass, had been seeking an estimated £586 million for the company. Arrowgrass said it will look to pursue alternatives, including a private equity-backed buyout.

San Francisco-based Tradeshift supports the digitalisation of trade financing, spend and receivables management, lending and payments, and private marketplaces, and aims to help clients unlock the $9 trillion of capital estimated to be trapped in online payments.

A Goldman Sachs-led Series E funding round raised $250 million in May 2018 and valued Tradeshift at $1.2 billion. It has been aggressively expanding.

Arrowgrass had in January extended its deadline for an “irrevocable offer” from Tradeshift to February 28.

See also: Arrowgrass to Tradeshift: Offer €669 Million for Basware by February 28

London-headquartered alternative asset manager Arrowgrass holds 24.8 per cent of shares and votes in Basware. It had set three conditions for a deal: 1) a price of €46.50 per share for the Finnish e-invoicing company; 2) the deal closes within three months of acceptance and 3) no rival offer 30 percent higher supersedes it.

The figure, a 25.9 percent premium on Basware’s average closing price over the five trading days prior to the announcement, would value Finland’s Basware at a robust €669 million (£586 million), according to Computer Business Review’s calculations.

Tradeshift previously bought privately held cloud integration provider Babelway for an undisclosed sum in December 2018. That deal allowed Tradeshift to bring in-house a service it has relied on extensively for the past six years.

(Babelway’s Software-as-a-Service allows the exchange and transformation of documents in formats ranging from Amazon to Chorus Pro, CSV, FTP, email, Excelt, Edifact, Dropbox, UBL, Tradacoms, X400, XML and more.)

Tradeshift in January said its bookings were up 250 percent year-on-year, new contract value hit $59 million for the quarter and a record 49 new customers signed for the quarter, including HSBC and Econocom.

In a separate statement Arrowgrass said it “believes that the value of Basware will be maximised for all shareholders through a combination of Basware with a strategic purchaser or the acquisition of the company by private equity. Arrowgrass will work… to ensure that all strategic alternatives are actively pursued.”

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