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Through its core invention, the YubiKey, Yubico solves the number one cybersecurity issue – use of stolen credentials. Yubico has had an exceptional organic growth journey since its inception; net sales have grown by a compounded annual growth rate (“CAGR”) of 50% since 2016. In 2022, Yubico reached all-time high net sales of
ACQ was established on the initiative of
ACQ has now found an acquisition target that meets all the investment criteria that were set in connection with the establishment of ACQ and believes that Yubico has strong potential to create value for ACQ’s shareholders over time. Yubico is a sustainable, high-quality company founded in
Key figures, Yubico
Net sales (2022) | |
Operating profit (2022) | |
Net sales CAGR (2016-2022) | 50% |
Key figures, the Transaction
Equity transaction value | |
Total number of newly issued shares | 51,759,560[2] |
Total number of shares in the Combined Company | 86,759,560[3] |
Transaction highlights:
• The Transaction values Yubico’s shares at
• The valuation of Yubico corresponds to an EV/Sales multiple of 5.2x[6], which is considered in line with comparable cybersecurity peers.
• Upon completion of the Transaction, it is estimated that ACQ’s current shareholders will hold approximately 40.3%[7] of the shares and votes in the Combined Company.
• Yubico’s preliminary bookings (total contract value) during the period January –
• In accordance with the SPAC rules of the Nasdaq Main Market Rulebook for Issuers of Shares, the non-conflicted board of directors[8] of ACQ has decided to propose that the shareholders of ACQ approve the Transaction at an extraordinary general meeting to be held on or around
• Certain large shareholders of ACQ, i.e., Bure, AMF Tjänstepension and
• Shareholders of Yubico representing more than 80% of the total outstanding shares of Yubico are either parties to the merger agreement entered into by ACQ and Yubico or have by other means approved and committed to support the Transaction. Pursuant to a customary drag-along provision under the existing shareholders’ agreement amongst each of the shareholders of Yubico, the remaining shareholders of Yubico will be deemed to have consented to the Transaction.
• In aggregate, up to a total of 51,759,560 ACQ shares will be issued as merger consideration, assuming that all outstanding and, at the time of completion of the Transaction, vested warrants in Yubico are exercised prior to the completion of the Transaction. Under the same assumption, up to a total of
• The non-conflicted board of directors of ACQ has obtained a fairness opinion from
• After completion of the Transaction, the five largest shareholders of the Combined Company are expected to be Bure, Yubico co-founder Stina Ehrensvärd, AMF Tjänstepension and
• Bure, which today holds approximately 15.3% of the shares in Yubico (on a fully diluted basis) through
• Patrik Tigerschiöld, currently chairman of the board of directors in ACQ, is intended to become chairman of the board of directors in the Combined Company.
• ACQ's board of directors has, together with Yubico's board of directors, considered appropriate financial targets for the Combined Company and have agreed on the following targets in the long-term (within 5 years): annual growth in bookings (order intake) of 25% on average, and 20% EBIT margin.
• Following completion of the Transaction, the Combined Company is expected to have a strong financial position which exceeds the current net cash position in Yubico.
• In connection with the Transaction, ACQ intends to change its listing venue from Nasdaq Stockholm (Main Market) to Nasdaq First North Growth Market. The completion of the Transaction is subject to, among other conditions, approval by ACQ’s and Yubico’s respective extraordinary general meetings, and approval by Nasdaq Stockholm of the Combined Company’s application for listing on Nasdaq First North Growth Market. The Transaction is expected to be completed during the third quarter 2023.
• Shareholders in ACQ voting against the Transaction will be able, subject to certain limitations, to request that their shares in ACQ are redeemed. Not more than 10% of the total number of shares issued by ACQ at the time of the extraordinary general meeting that is to resolve upon the Transaction may be redeemed. In order to achieve a suitable cash position in the Combined Company, depending on the outcome of the share redemption procedure, and to secure its obligation to effect cash payments to certain shareholders resident in certain foreign jurisdictions (including
“I am pleased to announce this proposed merger between ACQ and Yubico, which meets all investment criteria communicated when we listed ACQ in 2021. Yubico is a trusted global brand in cybersecurity with a unique blue-chip customer base and is led by a strong management team with a proven track record of profitable growth. By listing Yubico through ACQ, we create a solid foundation for the company to continue its successful growth journey and create value for all our shareholders.”
Stina Ehrensvärd, co-founder of Yubico, commented:
“When Jakob Ehrensvärd and I founded Yubico in
I am excited that
I am continuing to support Yubico’s development as a member of the board and I am working to increase awareness on cybersecurity in my recent role as Yubico’s
“I am honored and thrilled by the opportunity to lead Yubico as the company prepares to go public through the merger with ACQ. We see continuous revenue growth, we are profitable, and the need for our technology and our position in the cybersecurity market has never been stronger.
I am looking forward to continuing my work with Yubico’s founders and the rest of our team, who all are instrumental to our company’s success. Becoming a listed company on the Swedish stock market will add opportunities to fuel our growth journey going forward as well as add a further quality stamp for our company. In addition, ACQ’s strong and long-term shareholder base provides a solid foundation to continue our growth journey in a listed environment.”
Caroline af Ugglas, on behalf of ACQ’s board of directors, commented:
“The non-conflicted board members of ACQ have carefully considered the potential transaction with Yubico that we have been presented with. We have ensured that a due diligence of Yubico’s operations has been conducted by professional external advisors, and we have obtained a fairness opinion from
Background and reasons
ACQ was listed on Nasdaq Stockholm in
ACQ intends to change its listing venue to Nasdaq First North Growth Market in connection with the completion of the Transaction since it considers that Nasdaq First North Growth Market provides better conditions, compared to Nasdaq Stockholm (Main Market), to complete the Transaction in view of the contemplated timetable for the Transaction, and that it also is a suitable listing venue for the Combined Company at this current stage.
Investment rationale
• Yubico is well positioned in a large and growing market underpinned by strong global sector trends, such as an increasing number of cyberattacks, cloud migration, digital transformation and larger investments in cybersecurity which drive demand for Yubico’s solutions. The underlying market is expected to grow by approximately 14% annually between 2021 and 2027 according to IDC[10].
• Yubico’s unique, highly differentiated value offering combines the highest level of security with ease of use. Yubico has sold over 22 million keys to some of the world’s largest companies, with zero known successful hacking attempts to date.
• Yubico has a remarkable customer base which spans across several sectors and includes some of the largest global technology companies.
• Yubico has shown rapid organic growth with a net sales CAGR of approximately 50% between 2016 and 2022. In recent years, Yubico’s gross margin has been around 80%. After investing in the organization over the last few years, Yubico is once again profitable, and well-positioned to capitalize on the underlying sector trends, its unique value offering and its strong customer base
• Yubico has a proven growth strategy which, inter alia, is focused on expanding the current customer base by increasing the number of users and areas of use, expanding to customers’ customers and third-party suppliers, landing new customers across all industry verticals, and entering new authentication adjacencies.
• Yubico has an experienced management team with deep industry knowledge, and several members of management have been with Yubico since the first years. Many of Yubico’s employees come from global leading IT companies, with extensive experience in technology-focused business development.
Description of the Combined Company
Business overview
Yubico is a global cybersecurity company headquartered in
MFA solutions have existed for decades; however, traditional solutions have often been hard to use, expensive, and companies have had to compromise between security requirements and convenience for their employees. What makes Yubico unique is its value proposition of both high security and ease of use.
Yubico has been leading innovation in the advanced MFA space for one and a half decade. The work with creating and evolving the best and most innovative open standards for authentication solutions, software development kits (SDKs) and implementation of secure authentication, Yubico has become one of the most highly regarded companies in the sector.
The YubiKeys have been adapted to relevant government regulations, including the American Federal Information Processing Standard (FIPS) and the French/European Certification de Sécurité de Premier Niveau (CSPN). These certifications are also part of Yubico’s work to lead open authentication standards. Thanks to the open standard strategy, YubiKeys are flexible and easy to use with virtually all computer and phone operating systems and the product has more than 800 verified partner integrations.
Yubico has established a unique track record where no accounts protected by YubiKeys are known to have been hacked to date. The YubiKey supports both modern and legacy systems, being compatible with multiple authentication protocols, including FIDO2/WebAuthn, Universal 2nd Factor (U2F), PIV/Smart Card, and One Time Password (OTP). This enables and makes it easier for enterprises with complex backends to implement the solution. The combination of open standard, an extensive integration database, support for multiple authentication protocols and a wide partner network allows for an almost universal fit for the YubiKey with enterprise system environments.
Yubico has achieved a distinctive position in the US technology sector with several of the major technology companies in the world, including
Yubico’s products and services are primarily sold to enterprises, but the YubiKey is an attractive proposition also for small to medium-sized businesses (SMBs) and security-conscious consumers. While large account enterprise sales are managed by the Yubico internal sales force, the consumer and SMB market is predominantly served at scale through e-commerce and a worldwide distributor and reseller network.
YubiKeys have historically only been sold against a one-time payment, also known as the perpetual basis, which gives the customer ownership of the product throughout its lifetime. Since 2020, Yubico also offers a subscription-based model, in which Yubico assumes a larger overall responsibility and retains ownership of the hardware. Since launch, the YubiKey subscription offering has grown to account for 15% of bookings in 2022, and the enterprise proposition includes an enterprise portal, YubiKey international delivery, support, extended warranty and professional services.
Yubico’s sales team works continuously with attracting new clients in both existing and new markets, as well as expanding within existing accounts. Yubico has historically shown strong growth with existing customers, with a high degree of repurchase rates. For example, the average annual repurchase rate between 2017-2022 was 132% from the top 25 customers. As history has shown, many customers expand their use of YubiKeys from internal use to expanding the use to a larger part of the value chain, for example to vendors, consultants and its own customers. This extension of enterprise use cases beyond the internal organisation is a big opportunity for future growth and has the potential to become a major source of revenue.
Going forward, ACQ expects Yubico to benefit from structural market trends, Yubico’s proven land and expand strategy as well as the company’s ability to broaden its offering to enter new customer verticals and adjacent market segments, creating a solid foundation for Yubico to continue its successful scale-up journey. The management team, together with Yubico’s approximately 390 employees, possess the desired capabilities to continue to scale and grow the business.
Key financials
Key financial information presented herein comprises selected key performance indicators for Yubico, extracted from Yubico’s historical financial statements for 2022, as well as from Yubico’s internal accounting systems that have not been audited. The financial information is prepared in accordance with BFNAR 2021:1 Årsredovisning och koncernredovisning (K3) which is the accounting standard the Combined Company will apply going forward following completion of the Transaction. From an accounting perspective, the Transaction will be accounted for as a reverse acquisition. Hence, the financial statements post completion of the Transaction will be presented in accordance with Yubico’s financial history. As ACQ does not have any operational or relevant financial history, ACQ’s financial data has not been included herein. For more information on the sources of financial information and definitions for the alternative performance measures, please refer to Appendix 1 of this press release.
Financial year ending 31 December | ||||||||
SEK thousands (unless otherwise stated) | 2022 | 2021 | 2020 | |||||
Bookings | 1,584,178 | 1,041,133 | 830,975 | |||||
Subscription bookings | 241,708 | 176,265 | 182,178 | |||||
Subscription share of bookings (%) | 15.3% | 16.9% | 21.9% | |||||
Net sales | 1,560,977 | 867,226 | 606,111 | |||||
Subscription sales | 141,140 | 58,007 | 6,528 | |||||
Subscription share of net sales (%) | 9.0% | 6.7% | 1.1% | |||||
Net sales growth (%) | 80.0% | 43.1% | N/A | |||||
Net sales growth (adjusted for change in foreign currency) (%) | 60.9% | 49.2% | N/A | |||||
Gross profit | 1,316,263 | 709,623 | 522,596 | |||||
Gross margin (%) | 84.3% | 81.8% | 86.2% | |||||
EBITDA | 226,445 | -57,057 | -223,403 | |||||
EBITDA margin (%) | 14.5% | -6.6% | -36.9% | |||||
Operating profit (EBIT) | 215,284 | -66,974 | -230,365 | |||||
EBIT margin (%) | 13.8% | -7.7% | -38.0% | |||||
Net cash | 231,492 | 199,499 | 252,813 | |||||
ARR | 204,666 | 108,854 | 61,002 |
Please refer to Appendix 2 for selected historical financial information for Yubico.
Certain preliminary financial information for the period January –
• Preliminary bookings (total contract value) during the period January –
Financial targets
ACQ's board of directors has, together with Yubico's board of directors, considered appropriate financial targets for the Combined Company and have agreed on the following targets in the long-term (within 5 years):
• Growth: Targets annual growth in bookings (order intake) of 25% on average.
• Profitability: Targets 20% EBIT margin.
• Dividend policy: For the foreseeable future, the board of directors of the Combined Company will primarily use generated cash flows for investing in continued growth.
Board of directors and CEO
The board of directors of the Combined Company is expected to comprise members of both Yubico’s and ACQ’s current board of directors, with Patrik Tigerschiöld intended to become the chairman of the board of directors. The nomination committee of ACQ will present its proposal regarding the composition of the board of directors of the Combined Company in the notice to the extraordinary general meeting in ACQ that is to be held on or around
Upon completion of the Transaction, Yubico’s CEO
Ownership structure
Yubico is owned, as per the date of this press release, among others by its co-founder Stina Ehrensvärd, and principal investors Bure (through Bure Growth),
Upon completion of the Transaction, ACQ’s current shareholders will hold approximately 40.3% of the shares and votes in the Combined Company. Bure, currently holding approximately 15.3% (on a fully diluted basis) of the shares and votes in Yubico and 20.0% of the shares and votes in ACQ, will be the largest shareholder in the Combined Company with a shareholding of approximately 17.4%. Bure will also hold 4,200,000 warrants in the Combined Company, which Bure received as a sponsor when ACQ was established. The sponsor warrants can be exercised for subscription of shares no earlier than
The table below sets out the anticipated holdings of the five largest shareholders of the Combined Company, based on the latest available shareholder data, and assuming all current shareholders of ACQ will have the same holdings at the time of completion of the Transaction:
Shareholder | Number of shares and votes (%) |
Bure | 17.4 |
AMF Tjänstepension and | 10.9 |
Stina Ehrensvärd | 10.1 |
6.1 | |
4.0 | |
Top five shareholders | 48.4 |
Other shareholders | 51.6 |
Total | 100% |
Source: ACQ
Bure Growth, Stina Ehrensvärd and
Recommendation by the board of directors of ACQ
The board of directors’ process for evaluating the Transaction
Patrik Tigerschiöld and
Board members Caroline af Ugglas,
The board’s recommendation
References in this section to the board of directors refer to the board of directors, excluding conflicted board members. All non-conflicted board members are unanimous in their support of the Transaction.
The board of directors of ACQ is of the opinion that the Transaction is beneficial to ACQ and its shareholders, and considers the merger consideration to be fair, from a financial point of view, to the shareholders of ACQ.
Further, the board of directors has obtained a fairness opinion from
The board of directors has been presented with the results of legal, financial, tax and pension due diligence of Yubico, as well as a market study, before deciding to propose that the shareholders of ACQ approve the Transaction.
Recommendation by the board of directors of Yubico
The board of directors[13] of Yubico is of the opinion that the Transaction is beneficial to Yubico and its shareholders, and considers the merger consideration to be fair, from a financial point of view, to the shareholders of Yubico.
Description of the Transaction
ACQ and Yubico have today signed a merger agreement and adopted a joint merger plan to combine ACQ and Yubico by way of a statutory merger under the Swedish Companies Act, whereby ACQ will absorb Yubico. The Transaction values Yubico’s shares at
In aggregate, up to a total of 51,759,560 ACQ shares will be issued as merger consideration, assuming that all outstanding and, at the time of completion of the Transaction, vested warrants in Yubico are exercised prior to the completion of the Transaction. Under the same assumption, up to a total of
Following completion, the Combined Company is expected to have a strong financial position which exceeds the current net cash position in Yubico.
There is a total of 2,404,129 outstanding warrants (Sw. teckningsoptioner) in Yubico, as well as stock options reflecting in all material respects the terms of the warrants, that have been issued under equity incentive plans implemented by Yubico to members of Yubico’s executive management and other employees. The warrants have been issued under different series and the subscription price varies between
Completion of the Transaction is conditional upon:
i. approval of the merger plan by the shareholders of each of ACQ and Yubico at their respective general meetings that are intended to be held on or around
ii. Nasdaq
iii. any permits and approvals of regulatory authorities that are necessary for the Transaction having been obtained on terms containing no remedies, conditions or undertakings which in the opinion of ACQ’s and Yubico’s respective board of directors, acting in good faith, would have a material adverse effect on the business, competitive or financial position of the Combined Company following completion of the Transaction;
iv. the merger not having been made in whole or in part impossible or materially impeded as a result of legislation, court rulings, decisions by public authorities or anything similar;
v. the pre-merger undertakings made by ACQ and Yubico as set out below in the section “Pre-merger undertakings” not having been breached prior to the day of the registration of the merger with the Swedish Companies Registration Office in any manner which would result in a material adverse effect on the merger or the Combined Company; and
vi. no change, matter or event or series of changes, matters or events having occurred that has had or could reasonably be expected to have a material adverse effect on the financial position or operation, including sales, results, liquidity, equity ratio, equity or assets of Yubico or ACQ or the Combined Company, and as a result of which the other party cannot reasonably be expected to complete the merger.
If the conditions set out above have not been satisfied or waived and completion of the Transaction has not taken place on or before
Pre-merger undertakings
Each of ACQ and Yubico have undertaken, for the period from the date of the merger plan until the day of the registration of the merger with the Swedish Companies Registration Office, to carry on their respective businesses in the ordinary course of business consistent with past practices and not to, without the prior written consent of the other party, not to be unreasonably withheld or delayed, take any of the following actions:
a) declare or pay any dividend or other distribution to shareholders or make any other transfer of value (Sw. värdeöverföring) as defined in Chapter 17, Section 1 of the Swedish Companies Act, except that ACQ may take actions to settle requests for redemption of shares from shareholders of ACQ who vote against the Transaction at the extraordinary general meeting in ACQ, in accordance with the Nasdaq Stockholm Main Market Rulebook for Issuers of Shares (the “
b) issue or create shares or other securities, except (i) for issuances of shares or other securities in Yubico under or relating to its incentive plans in order to enable the participants in such incentive plans to exercise their rights, (ii) for the issuance of shares in ACQ to be paid as share consideration in the Transaction, and (iii) that ACQ shall be allowed to resolve on directed issues of shares following the share redemption procedure in order to achieve a suitable cash position in ACQ, depending on the outcome of the share redemption procedure, and for purposes of securing its obligation to effect cash payments to Ineligible Foreign Holders in Yubico;
c) acquire, sell or agree to acquire or sell, material shareholdings, businesses or assets;
d) enter into or amend any material contracts or arrangements, or incur any material additional indebtedness other than in the ordinary course of operating its business; or
e) amend the articles of association or any other constitutional documents, except that ACQ may amend its articles of association so to ensure that they are adapted to the Combined Company following completion of the Transaction.
Listing on Nasdaq First North Growth Market
ACQ will as soon as possible initiate a process to change listing venue from Nasdaq Stockholm (Main Market) to Nasdaq First North Growth Market, subject to the shareholders’ approval of the Transaction at ACQ’s and Yubico’s general meetings, respectively. Nasdaq Stockholm’s decision to approve a listing of the Combined Company’s shares and the first day of trading in the Combined Company’s shares on Nasdaq First North Growth Market is expected to occur during the third quarter 2023.
In connection with the listing process, ACQ will prepare a company description with information about the Combined Company, in accordance with the requirements set out in Nasdaq First North Growth Market’s
Extraordinary general meetings
ACQ and Yubico will each convene an extraordinary general meeting, to be held on or around
In addition to the approval of the Transaction, the board of directors of ACQ will propose that the shareholders in ACQ (i) resolve to issue shares as consideration in the Transaction (see further above under “Description of the Transaction”), and (ii) authorize the board of directors to resolve to issue shares in directed issues in ACQ in order to achieve a suitable cash position in the Combined Company following completion of the Transaction, depending on the outcome of the share redemption procedure, and to secure its obligation to effect cash payments to Ineligible Foreign Holders in Yubico. The board of directors of ACQ will further propose that the shareholders resolve to make certain amendments to ACQ’s articles of association, including to revise the name of the Combined Company to “Yubico AB”.
The nomination committee of ACQ will present its proposal regarding the composition of the board of directors of the Combined Company in the notice to the extraordinary general meeting in ACQ.
Voting commitments
Certain large shareholders of ACQ, i.e. Bure, AMF Tjänstepension and
Shareholders of Yubico representing more than 80% of the total outstanding shares of Yubico are either parties to the merger agreement entered into by ACQ and Yubico or have by other means approved and committed to support the Transaction. Pursuant to a customary drag-along provision under the existing shareholders’ agreement amongst each of the shareholders of Yubico, the remaining shareholders of Yubico will be deemed to have consented to the Transaction and are expected to appoint a proxy, to vote on their behalf at the extraordinary general meeting of Yubico, without any further action on their part.
Redemption of shares
In accordance with the
Potential directed share issues in ACQ
In order to achieve a suitable cash position in the Combined Company, depending on the outcome of the share redemption procedure, and to secure its obligation to effect cash payments to Ineligible Foreign Holders in connection with the Transaction, ACQ intends to resolve upon one or several directed share issues at a time or times of its choosing. Such directed issues will, if implemented, be carried out through accelerated book building processes.
Indicative timetable
The notice to the extraordinary general meeting in ACQ that is to resolve upon the Transaction is published. | |
The information brochure regarding the Transaction is published. | |
Extraordinary general meetings in ACQ and Yubico. | |
During the third quarter 2023 | The company description is published. |
During the third quarter 2023 | Nasdaq |
During the third quarter 2023 | Completion of the Transaction. |
During the third quarter 2023 | First day of trading in the Combined Company’s shares on Nasdaq First North Growth Market. Last day of trading in ACQ’s shares on Nasdaq Stockholm. |
Advisors
Webcast/teleconference
ACQ and Yubico will hold a webcast/teleconference today,
To participate in the conference, click on the following link https://ir.financialhearings.com/acq-press-conference-2023 which you can also use to write questions. If you want to ask a question verbally at the teleconference, register using the following link: https://conference.financialhearings.com/teleconference/?id=5007031.
After registering you will receive a telephone number and ID to log into the conference.
[1] Based on the average spot exchange rate in SEK/USD (rounded to 10.37) during the period
[2] Assuming that all outstanding and, at the time of completion of the Transaction, vested warrants in Yubico are exercised prior to the completion of the Transaction.
[3] Assuming that all outstanding and, at the time of completion of the Transaction, vested warrants in Yubico are exercised prior to the completion of the Transaction.
[4] Based on the average spot exchange rate in SEK/USD (rounded to 10.37) during the period
[5] The numbers have been rounded, the complete numbers are as follows; 2.897 ACQ shares will be received for each 0.57866 Yubico share in respect of 57.866% of the total number of Yubico shares held by each shareholder, and
[6] Enterprise value (EV) of
[7] Ownership shares in the Combined Company throughout this announcement are based on the assumption of full subscription of vested warrants at completion of the Transaction.
[8] Patrik Tigerschiöld and
[9] In addition to ACQ’s current cash position, cash from subscription of warrants will be used to pay the cash merger consideration.
[10] IDC, Market Insights on Advanced Authentication, 2023.
[11]
[12] 26% of the G2000 companies. Forbes Global 2000 list ranks the largest companies in the world using metrics including sales, profit, assets and market value.
[13]
[14] Based on the average spot exchange rate in SEK/USD (rounded to 10.37) during the period
[15] The numbers have been rounded, the complete numbers are as follows. 2.897 ACQ shares will be received for each 0.57866 Yubico share in respect of 57.866% of the total number of Yubico shares held by each shareholder, and
[16] In addition to ACQ’s current cash position, cash from subscription of warrants will be used to pay the cash merger consideration.
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