EQS-News: EQS and Thoma Bravo Enter into an Investment Agreement to Create a Partnership for Future Growth

EQS and Thoma Bravo Enter into an Investment Agreement to
Create a Partnership for Future Growth

• EQS and Thoma Bravo signed an investment agreement and announce the launch of a public takeover offer
• Highly attractive cash offer of EUR 40.00 per EQS share, representing a premium of 53% to the closing price on November 15, 2023, as well as a premium of 61% to the three-month volume weighted average share price
• The Management and Supervisory Board of EQS are fully supporting the offer
• With Thoma Bravo, EQS gains additional operational and software sector expertise, enhanced financial flexibility, and strategic support to fully seize the long-term growth opportunity in the rapidly growing European compliance market
• Thoma Bravo additionally agreed to subscribe a 10% capital increase by EQS at the offer price effective upon completion of the offer
• Thoma Bravo has already secured a stake of approx. 60% of total EQS share capital through irrevocable undertakings with key shareholders
• EQS will delist immediately after completion of the offer
• First investment of Thoma Bravo in the German market, following increased activity in Europe

MUNICH, Germany, and LONDON, United Kingdom – November 16, 2023 – EQS Group AG (“EQS”), a leading international cloud provider in the fields of corporate compliance, investor relations and ESG, and Thoma Bravo, a leading software investment firm, today entered into an investment agreement under which Thoma Bravo will support the future growth of EQS and launch a public takeover offer (the “Offer”) for all outstanding shares of EQS at an offer price of EUR 40.00 in cash per share.

As new regulations like the EU Whistleblowing Directive continue to drive demand for innovative compliance software solutions, EQS will benefit from Thoma Bravo’s software and operational expertise to accelerate product innovation and fully seize the long-term growth opportunities in Europe. To jointly win the European compliance software market, Thoma Bravo’s investment will provide EQS with additional funding for future growth initiatives and capital for potential add-on acquisitions. This will also include investments in EQS’ strategy to address the increasingly complex investor relations and corporate compliance landscape which calls for automated and streamlined processes with one secured and integrated platform. EQS and Thoma Bravo believe that such investments can be best conducted in a private setting outside of the stock exchange. In addition, the investment agreement defines certain cornerstones of the partnership including commitments to EQS’ employees, business partners and other stakeholders. As part of the partnership, Thoma Bravo has committed to provide funding to EQS by means of subscribing a cash capital increase of 10% of EQS’ share capital at the offer price at completion of the Offer. The transaction marks Thoma Bravo’s first investment in a German company.

“EQS is a unique German software enterprise at the forefront of three megatrends: digitization, regulation and ESG, which have been driving its profitable growth,” said Irina Hemmers, Partner at Thoma Bravo. “Together with Achim Weick and the experienced team at EQS, we will build and expand the platform into a pan-European Compliance and ESG champion for the benefit of customers’ evolving needs in this very dynamic market. Thoma Bravo is excited to join forces with EQS’ management team to enhance its development of state-of-the art software solutions.”

“In the past 23 years, EQS has gone from strength to strength, evolving into a RegTech leader which delivers software solutions to thousands of clients including all DAX40 companies as well as blue chip corporations around the world. From day one we firmly believed that transparency creates the most important corporate capital: trust. We empower companies not only to achieve major milestones on the capital markets, but also to become and stay trusted by all stakeholders. Working with Thoma Bravo will allow us to enter into the next chapter of our growth journey. Together, we will succeed in establishing our EQS COCKPIT as the leading European compliance management system for organizations of all sizes,” said Achim Weick, founder and CEO of EQS. “With its expertise in software, demonstrated track record and passion for delivering transformative technologies, Thoma Bravo is the right partner to support our growth ambitions.”

The announcement today is the result of a structured process as part of which the Management Board of EQS has engaged intensely with a number of selected interested parties over the last months in order to find the right partner and secure the best possible result for EQS and its shareholders.

Key Terms of the Transaction

Thoma Bravo will offer shareholders of EQS EUR 40.00 per share in cash. This offer price represents a highly attractive premium of 53% to the XETRA closing share price of EQS on November 15, 2023, the last trading day prior to this publication and 61% to the three-month volume weighted average share price prior to this date. Based on this offer price, the total equity value will be approximately EUR 400 million. Thoma Bravo and EQS believe that the Offer represents a highly compelling opportunity for all of EQS’ shareholders to realize a significant part of the potential future value creation immediately upfront.

Thoma Bravo has already secured a stake of approximately 60% of the total EQS share capital by entering into irrevocable tender undertakings with key shareholders of EQS, including Achim Weick, the CEO of EQS who will in addition re-invest some of this ownership in EQS alongside Thoma Bravo into the holding structure All key shareholders will receive the same offer price under these arrangements.

Thoma Bravo has underwritten the transaction entirely with equity provided by its funds.

Both the Management Board and Supervisory Board of EQS welcome and support the Offer and intend to, subject to reviewing the offer document, recommend all EQS shareholders to accept the Offer. In addition to the tender commitment and partial re-investment of Achim Weick, the remaining members of the Management Board have also confirmed that they will tender any EQS shares held by them into the Offer.

Strong Strategic Fit

Thoma Bravo has a 20 plus year history of providing capital and support to high-growth software businesses and has acquired or invested in more than 450 software and technology companies. Having deployed more than €10 billion of equity across 11 transactions in Europe in the last 12 years, this transaction marks Thoma Bravo’s first platform investment in Germany.

EQS is a leading developer and provider of cloud-based software solutions in the areas of corporate compliance, investor relations and ESG. EQS’ leading Compliance and Investor Relations software solutions allow thousands of companies across the world to securely meet complex regulatory requirements, minimize risks, and transparently report on business performance and its impact on society and the environment.

“We have followed EQS’ impressive growth journey for many years as it has established itself as a leading provider of software solutions to ensure regulatory compliance and promote efficient capital markets,” said Will Downing and David Tse, Vice Presidents at Thoma Bravo. “EQS is well positioned to be the partner of choice for companies navigating increasingly complex compliance and reporting environments, including new EU regulations that have elevated and will continue to increase the need for software workflows to improve business transparency and build trust. We look forward to working with the EQS team to further grow the business through organic product innovation and M&A.”

Transaction Details

The completion of the Offer will be subject to customary offer conditions, including regulatory clearances but will not include a minimum acceptance threshold. The transaction is expected to close in January or February 2024.

EQS and Thoma Bravo have agreed that the Management Board will terminate the inclusion of the EQS shares in the trading on the open market (Freiverkehr) immediately after completion of the Offer. A separate delisting offer will not be required.

Further details of the Offer including its terms and conditions will be set out in the offer document upon the publication of which the acceptance period of the Offer will commence. Given EQS is not listed in the regulated market, the Offer will not be governed by the German Securities Acquisition and Takeover Act (WpÜG). The offer document (in German and English language) and other information pertaining to the Offer will be published on the following website:

www.cloud-solutions-offer.com.

Advisors

Goldman Sachs Bank Europe SE is acting as financial advisor and GLNS is acting as legal counsel to EQS. ParkView Partners is acting as financial advisor and Kirkland & Ellis is acting as legal counsel to Thoma Bravo.

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About Thoma Bravo

Thoma Bravo is one of the largest software investors in the world, with more than US$131 billion in assets under management as of June 30, 2023. Through its private equity, growth equity and credit strategies, the firm invests in growth-oriented, innovative companies operating in the software and technology sectors. Leveraging Thoma Bravo's deep sector expertise and strategic and operational capabilities, the firm collaborates with its portfolio companies to implement operating best practices and drive growth initiatives. Over the past 20 years, the firm has acquired or invested in more than 450 companies representing over US$250 billion in enterprise value (including control and non-control investments). The firm has offices in Chicago, London, Miami, New York and San Francisco. For more information, visit Thoma Bravo's website at thomabravo.com.

About EQS

EQS is a leading international cloud provider in the fields of corporate compliance, investor relations and ESG. Working with EQS, more than 10,000 companies worldwide inspire trust by fulfilling complex regulatory requirements in a reliable and secure manner, minimizing risks and communicating their business success and its impact on society and the climate transparently to stakeholders. EQS’s products are pooled in the cloud-based software EQS COCKPIT. This platform ensures the professional handling of compliance workflows in the fields of whistleblower protection and case management, policy management, business approvals, third party management, insider list management and disclosure obligations. Listed companies benefit from a global newswire, investor targeting and contact management, IR websites, digital reports and webcasts for efficient and secure investor communications. In addition, EQS offers software for the management of ESG (environment, social, governance) data, the fulfilment of human rights due diligence obligations along corporate supply chains and for rule-compliant sustainability reporting. EQS was founded in 2000 in Munich, Germany. Today the group employs around 600 professionals and has offices in the world’s key financial markets.

Contacts

Legal Disclaimer

This publication is neither an offer to purchase nor a solicitation of an offer to sell shares in EQS or any other securities. The Offer itself as well as its definite terms and conditions and further provisions concerning the Offer will be published in the offer document. Investors and shareholders of EQS are strongly advised to thoroughly read the offer document and all other relevant documents regarding the Offer when they become available, as they will contain important information.

This publication may contain statements about Thoma Bravo, and/or EQS and/or either of its affiliates that are or may be "forward-looking statements", i.e., statements about processes that take place in the future, not in the past. Forward-looking statements include, without limitation, statements that typically contain words such as "seek", "estimate", "intend", "plan", "believe", "continue", "will", "may", "should", "would", "could", or other words of similar meaning. By their nature, forward-looking statements are based on current expectations, assumptions, estimates and projections and involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and many of which are outside the control of Thoma Bravo, EQS and/or any of its affiliates. Thoma Bravo and EQS caution you that forward-looking statements are not guarantees of the occurrence of such future events or of future performance. Any forward-looking statement speaks only as at the date of this announcement. Except as required by applicable law, Thoma Bravo does not undertake any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise.

Since the EQS Shares are not admitted to trading on an organized market within the meaning of Section 1 (1) of the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz, "WpÜG"), the Offer will not be subject to the WpÜG. The offer document will not be reviewed by any regulatory authority in Germany and no registrations, admissions or approvals of the offer document are contemplated in any other jurisdiction.

The Offer will be published and made under the laws of the Federal Republic of Germany and certain applicable provisions of securities laws of the United States of America. Any agreement that is entered into as a result of accepting the Offer will be governed by the laws of the Federal Republic of Germany and is to be interpreted in accordance with such laws.