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Adyen announces intention to launch an Offering and listing of its shares on Euronext Amsterdam
May 24, 2018
Amsterdam, the Netherlands – Adyen B.V. (or the “Company”) today announces its intention to proceed with an Offering (the “Offering”) and the listing of its shares on Euronext Amsterdam (the “Listing”).
Adyen is an integrated global payments platform, which since its inception in 2006 has become a global leader in facilitating payments for large merchants across channels and geographies.
The Offering is expected to consist of a sale of existing shares held by certain selling shareholders1 (the “Selling Shareholders”) on a pro rata basis.
Adyen is a technology company offering a single integrated platform that facilitates frictionless payments for merchants across channels and geographies.
The Company’s unique end-to-end solution is redefining the global electronic payments market.
The Company’s approach to connecting directly with card schemes capturing payments data across channels has enabled it to develop differentiated solutions for merchants, supporting an increase in payments conversion and a reduction in fraudulent transactions, while also yielding superior shopper insights.
Adyen primarily targets large global companies as well as an increasing number of domestic/mid-market merchants and has become the trusted partner of many of the world's most recognizable brands.
Adyen is uniquely positioned to benefit from secular market trends and has identified multiple avenues for growth, both from its existing industry-leading enterprise merchants as well as new enterprise and mid-market clients.
The Company has an experienced founder-led management team and fosters a unique entrepreneurial culture.
For the year ended 31 December 2017, Adyen generated Net Revenue of €218 million, representing 38% growth compared to 2016, and Adjusted EBITDA2 of €99 million, representing an Adjusted EBITDA margin3 of 45.5%.
Processed volumes4 increased to €108 billion in 2017 compared to €66 billion in 2016, representing year-on-year growth of 63%.
The intended Offering will consist of a private placement of existing shares held by the Selling Shareholders to institutional investors in various jurisdictions, including the Netherlands.
The Selling Shareholders intend to sell approximately 15% of the Company’s shares in the IPO.
Application expected to be made for a Listing of the Company's shares on Euronext Amsterdam
The Company and the Selling Shareholders expect to enter into customary lock-up arrangements with the underwriters in connection with the Offering and Listing.
The Company has appointed Morgan Stanley & Co. International plc and J.P. Morgan Securities plc as Joint Global Coordinators and Joint Bookrunners for the Offering. ABN AMRO Bank N.V., BofA Merrill Lynch and Citigroup Global Markets Limited are acting as Joint Bookrunners.
Pieter van der Does, Co-founder, President & CEO said:
“We feel that we are still in the early stages of a remarkable journey. Our focus remains on building new functionality and on helping our merchants grow. This offering provides us with the freedom to keep building the company, while offering our shareholders a path to liquidity. Adyen will remain a company that is driven by a long-term vision and strategy”.
Adyen Business Description
Adyen offers an efficient single platform that enables the acceptance and processing of cards and local payments globally across its merchants' online, mobile and point-of-sale ("POS") channels.
The Company’s global platform has integrated and simplified the payments value chain, enabling it to partner with large merchants to rapidly scale their businesses both locally and globally, without the inefficiencies of traditional payment platforms.
Adyen’s data-centric platform increases conversion rates while reducing the risk of fraudulent transactions, reducing settlement times, and providing comprehensive data insights to merchants that are crucial for managing their interactions with shoppers.
The Company’s ever-evolving platform encompasses the entire payments value chain as it relates to merchants, from checkout to payment settlement. This single integrated platform provides a merchant-friendly alternative to the multiple legacy providers that merchants previously had to rely on for payments processing.
Adyen primarily targets large, global enterprise merchants as well as, increasingly, domestic and mid-market merchants, which the Company views as the next adjacent segment to enterprise merchants. In 2017, Adyen processed transactions for several thousand merchants around the world and across industries, including retail, travel, digital services, hospitality and marketplaces. The Company’s customer base includes Uber, Netflix, Facebook, Spotify, Etsy, Vodafone, Sephora, Tory Burch, L’Oréal and booking.com.
As of 31 December 2017, the Company had 668 employees globally, with its headquarters in Amsterdam, the Netherlands, and 14 other offices in the United States (San Francisco, New York), Latin America (Mexico City, Sao Paulo), Asia-Pacific (Singapore, Sydney, Shanghai) and Europe (Paris, London, Manchester, Berlin, Stockholm, Brussels and Madrid).
In 2017, Adyen obtained a banking license in Europe, enabling the Company to offer payment processing services with direct settlement of funds to merchants from an Adyen account instead of having to rely on external banking partners, the aim of which is to provide enhanced performance and reliability.
One single platform built for growth
The typical payments landscape has been characterized by a fragmented patchwork of providers and legacy systems, which Adyen believes has led to an inferior shopper experience, including both explained and unexplained declined authorizations resulting in low conversion rates and a high number of fraudulent transactions leading to considerable administrative costs for merchants.
In this context, the Adyen team sets out to fundamentally change the payments industry by building a single, fully-integrated global platform, aimed at providing a high-quality level of service to merchants.
The Company’s state-of-the-art platform has been built in-house and is designed to replace several blocks of the traditional payments value chain (gateway, risk management, processing and acquiring) through a single, integrated platform, thereby providing the Company with better intelligence into the payments flow and allowing it to provide high-quality service levels and transparency to merchants.
A large global market opportunity
Adyen is tapping into the vast global payments market.
For 2017, Nilson estimated global card purchases to be $23 trillion5.
This fast-growing market is fueled by the long-term shift from cash to non-cash payment methods and the increase of e-commerce globally.
Delivering significant benefits for merchants
Adyen's proprietary payments platform enables the Company to deliver high-quality service levels to its merchants resulting in a number of key benefits:
A global platform with local depth able to offer merchants access to a large number of global card schemes (e.g. Visa, Mastercard) and local payment methods (e.g. Alipay in Asia) tailored for shopper payment preference in each market.
Unified commerce6 across all channels (online, mobile and POS) allowing merchants to rapidly expand in existing markets and enter new markets, while retaining a centralized payments platform and holistic view of their shoppers and offering them a personalized, improved shopping experience, regardless of what channel they choose to shop through.
Data-centric solutions to increase revenue while reducing risk and bolstering fraud protection.
Membership to ongoing innovation, with Adyen continuously improving its products for all merchants and innovating at a fast pace.
Trusted partner of many of the world's most recognizable companies
Adyen has consistently sought to provide its merchants with best-in-class service globally and transparent pricing, and as a result, has been able to assemble a strong merchant base consisting of several thousand merchants. The Company’s merchant portfolio comprises many of the world’s leading companies and brands including Uber, Netflix, Facebook, Spotify, Etsy, Vodafone, Sephora, Tory Burch, L’Oréal, and booking.com.
An experienced founder-led management team fostering an entrepreneurial culture
Since the Company’s inception in 2006, Adyen’s management team has focused on fostering an entrepreneurial culture, at the heart of which rests a commitment to superior service for merchants and to creating benefits for all stakeholders, as represented by the "Adyen Formula". The principles embodied in the Adyen Formula include working in teams to build solutions to benefit all merchants (not just one), launching new products and solutions fast, and iterating and making good choices in order to build an ethical business and drive sustainable growth for the Company's merchants.
A business that is difficult to replicate
Adyen’s business is difficult to replicate as a result of numerous characteristics, including its single, globally integrated platform enabling a seamless and high-quality transaction experience, the Company’s tech DNA and payments expertise, the strong relationships it fosters with some of the world's largest and most globally connected merchants, the Company’s global presence that is reinforced by local expertise, partnerships with key constituencies and a suite of licenses and regulatory know-how, Adyen’s powerful culture attracting some of the best people in the payments industry, and its pricing transparency.
Adyen aims to be at the forefront when it comes to developing new functionality as business models evolve and believes that it is well positioned to significantly grow its business and increase scale over the coming years, with growth opportunities mostly centered on the following three strategic pillars:
Continued focus on enterprise merchants: Adyen sees significant potential for upside through deepening relationships with its existing merchant base, acquiring new enterprise merchants across different verticals and geographies, and by capitalizing on these merchants’ changing business models.
Increasing Adyen’s unified commerce footprint, enabling merchants to offer a uniform experience across channels and through increased focus on it's point-of-sale offering which it believes will continue to grow in the coming years.
Additional focus on mid-market merchants, seen as an adjacent segment to enterprise merchants, and where Adyen believes it is well-positioned to grow.
Adyen has set the following financial objectives, which it aims to achieve by executing its strategy:
Net revenue growth: Adyen aims to continue the growth of net revenues and achieve a CAGR (compound annual growth rate) between mid-twenties and low thirties in the medium term by executing its sales strategy. For 2018, the Company expects net revenue to grow at least 40%.
EBITDA margin: Adyen aims to improve its annual EBITDA margin, and expects such margin to benefit from its operational leverage and increase to levels above 55% in the long term.
Capital expenditure: Adyen aims to maintain a sustainable capital expenditure level of up to 5% of its net revenue.
Adyen intends to retain any profits to expand the growth and development of the Company’s business and, therefore, does not anticipate paying dividends to its shareholders in the foreseeable future.
The Offering will consist of solely of a private placement to institutional investors in various jurisdictions outside the United States, including the Netherlands, and, in the United States, only to qualified institutional buyers in reliance on Rule 144A or pursuant to another exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Offering will consist of a sale of existing shares held by current shareholders. The Selling Shareholders intend to sell approximately 15% of the Company’s shares in the Offering.
The Company and the Selling Shareholders expect to enter into customary lock-up arrangements with the underwriters.
The Company has appointed Morgan Stanley & Co. International plc and J.P. Morgan Securities plc as Joint Global Coordinators and Joint Bookrunners for the Offering. ABN AMRO Bank N.V., BofA Merrill Lynch and Citigroup Global Markets Limited have been appointed as Joint Bookrunners.
If and when the expected IPO is launched, full information about the Offering and Listing will be included in the prospectus relating to the IPO and Listing. If and when the Offering is launched, the prospectus will be published after it has been approved by the Netherlands Authority for the Financial Markets (AFM). This approval process is ongoing. Once approved by the AFM, the prospectus will be published and made available at the start of the offer period, subject to securities law restrictions in certain jurisdictions. The approval of the prospectus by the AFM shall not constitute an approval of the soundness of the transaction proposed to investors.
Further details of the intended Offering and Listing will be announced in due course.
These materials are for information purposes only and are not intended to constitute, and should not be construed as, an offer to sell or subscribe for, or the announcement of a forthcoming offer to sell or subscribe for, or a solicitation of any offer to buy or subscribe for, or the announcement of a forthcoming solicitation of any offer to buy or subscribe for, ordinary shares in the share capital of the Company (the "Shares") in the United States of America (the "United States") or in any other jurisdiction. No offer to sell or subscribe for Shares, or announcement of a forthcoming offer to sell or subscribe for Shares, or solicitation of any offer to buy or subscribe for Shares, or announcement of a forthcoming solicitation of any offer to buy or subscribe for, Shares will be made in the United States or in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of such jurisdiction, and the distribution of this communication in jurisdictions may be similarly restricted. Persons into whose possession this communication comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the security laws of any such jurisdiction.
The Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") and may only be offered, sold, transferred or otherwise disposed of, directly or indirectly, in the United States of America (as defined in Regulation S under the U.S. Securities Act) if registered under the U.S. Securities Act or an exemption from such registration is available. The Company does not intend to register any portion of the contemplated offering of Shares in the United States or to conduct a public offering of Shares in the United States.
The Company has not authorized any offer to the public of Shares in any Member State of the European Economic Area. With respect to any Member State of the European Economic Area which has implemented the Prospectus Directive (each a "Relevant Member State"), no action has been undertaken or will be undertaken to make an offer to the public of Shares, except that an offer to the public in that Relevant Member State of Shares may be made at any time under the following exemptions under the Prospectus Directive (as defined below), if they are implemented in that Relevant Member State: to any legal entity which is a "qualified investor" as defined in the Prospectus Directive; or in any other circumstances falling within Article 3(2) of the Prospectus Directive (as defined below).
For the purpose of this paragraph, the expression "offer of securities to the public" means the communication in any form and by any means of sufficient information on the terms of the offer and the Shares to be offered so as to enable the investor to decide to exercise, purchase or subscribe for the Shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in each Relevant Member State and the expression "2010 PD Amending Directive" means Directive 2010/73/EU.
Any such investor will also be deemed to have represented and agreed that any Shares acquired by it in the contemplated offering of Shares have not been acquired on behalf of persons other than such investor. This announcement is not an advertisement within the meaning of the Prospectus Directive and does not constitute a prospectus. The offer to acquire Shares pursuant to the proposed offering will be made, and any investor should make his investment decision, solely on the basis of information that will be contained in the prospectus to be made available in connection with such offering. When made available, copies of the prospectus may be obtained at no cost from the Company and through the website of the Company.
In the United Kingdom, this document and any other materials in relation to the Shares is only being distributed to, and is only directed at, and any investment or investment activity to which this document relates is available only to, and will be engaged in only with, persons who are "qualified investors" (as defined in section 86(7) of the Financial Services and Markets Act 2000) and who are (i) persons having professional experience in matters relating to investments who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 ("Financial Promotion") Order 2005 (the "Order"); or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). Persons who are not relevant persons should not take any action on the basis of this document and should not act or rely on it. No action has been taken by the Company that would permit an offer of Shares or the possession or distribution of these materials or any other offering or publicity material relating to such Shares in any jurisdiction where action for that purpose is required.
Morgan Stanley & Co. International plc, J.P. Morgan Securities plc, Citigroup Global Markets Limited and Merrill Lynch International are each authorized by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. ABN AMRO Bank N.V. (and together with Morgan Stanley & Co. International plc, J.P. Morgan Securities plc, Citigroup Global Markets Limited and Merrill Lynch International, the "Banks") is supervised by the AFM and De Nederlandsche Bank N.V. The Banks are acting exclusively for the Company and no one else in connection with the Offering. They will not regard any other person as their respective clients in relation to the Offering and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, nor for providing advice in relation to the Offering, the contents of this announcement or any transaction, arrangement or other matter referred to herein.
None of the Banks or any of their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.
In connection with the Offering, each of the Banks and any of their affiliates, may take up a portion of the Shares as a principal position and in that capacity may retain, purchase, sell, offer to sell for their own accounts such Shares and other securities of the Company or related investments in connection with the Offering or otherwise. Accordingly, references in the prospectus, once published, to the Shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, any of the Banks and any of their affiliates acting in such capacity. In addition, each of the Banks and any of their affiliates may enter into financing arrangements (including swaps or contracts for differences) with investors in connection with which they may from time to time acquire, hold or dispose of Shares. None of the Banks intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.
This communication is directed only at relevant persons. Any investment activity to which this communication relates will only be available to and will only be engaged with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.
Some of the information in these materials may contain projections or other forward-looking statements regarding future events or the future financial performance of the Company. You can identify forward-looking statements by terms such as "expect", "believe", "anticipate", "estimate", "intend", "will", "could," "may" or "might", the negative of such terms or other similar expressions. The Company wishes to caution you that these statements are only predictions and that actual events or results may differ materially. The Company does not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in projections or forward-looking statements of the Company, including, among others, general economic conditions, the competitive environment, rapid technological and market change in the industries the Company operates in, as well as many other risks specifically related to the Company and its operations.
Neither these materials nor any copy of it may be taken or transmitted, directly or indirectly, into the United States, Australia, Canada or Japan. These materials do not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase or subscribe nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefore. The offer and the distribution of these materials and other information in connection with the listing and offer in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
This communication is distributed in member states of the European Economic Area which apply the Prospectus Directive (including the Netherlands), but only to those persons who are qualified investors, and such other persons as this document may be addressed on legal grounds, and no person that is not a qualified investor and a relevant person may act or rely on this document or any of its contents.
Contentis B.V., Sintentis B.V., Spreng B.V., Ark B Holding B.V., Partners in Equity III B.V., Mabel van Oranje, KDP Projects B.V., DIA Holding B.V., Adinvest AG, Pentavest S.à r.l., Felicis Ventures III, L.P., General Atlantic Everest B.V., Bridford Music LLC and Stichting Administratiekantoor Adyen.
Adjusted for the impact of a €56 MM one-off non-operational gain in 2016 related to a consideration received for the purchase of Visa Europe by Visa Inc. in exchange for the membership in Visa Europe that Adyen previously obtained to facilitate core operations.
Adjusted EBITDA Margin defined as the ratio of Adjusted EBITDA to Net Revenue.
Defined as the value of all transactions processed by Adyen.
Nilson Report as of April 2018.
Unified commerce: more generally defined as the elimination of distinctions between the channels through which a shopper interacts with a merchant and, in the case of Adyen’s current product offering, combining POS, online and mobile and standardizing across channels for merchants.
For the years ended 31 December 2015 to 2017.
Adjusted for impact of non-operational gain in 2016 (€56 MM) related to consideration received for the purchase of Visa Europe by Visa Inc.
Adjusted EBITDA Margin defined as the ratio of Adjusted EBITDA and Net Revenue.
Free cash flow refers to Adjusted EBITDA net of capital expenditure, with capital expenditure consisting of the line items "Purchases of plant and equipment" and "Capitalization of intangible assets" on the consolidated statement of cash flows.
Adyen has not defined, and does not intend to define, ‘‘medium term’’ or "long-term". Adyen's medium- term and long-term financial objectives should not be read as forecasts, projections or expected results and should not be read as indicating that Adyen is targeting such metrics for any particular year but are merely objectives that result from Adyen’s pursuit of its strategy. Adyen's ability to meet its 2018, medium term and long-term objectives is based upon the assumption that Adyen will be successful in executing its strategy and, furthermore, depends on the accuracy of a number of assumptions involving factors that are significantly or entirely beyond Adyen's control and are subject to known and unknown risks, uncertainties and other factors that may result in Adyen being unable to achieve these objectives.