Link Mobility’s advisers receive NOK 140 million to help the IT company return to the stock exchange. – Yes, it’s expensive. But this is what it costs, says chairman of the board Jens Rugseth.
Link Mobility’s comeback on the Oslo Stock Exchange will be an expensive affair.
The IT company will raise NOK 2.5 billion in new equity in connection with the listing, and at the same time existing owners will sell shares for at least NOK 3.5 billion.
The issue prospectus states that the listing process will cost around NOK 140 million in fees to a total of four brokerages and four law firms, as well as auditors and other advisers.
– I’m a stingy guy, and I do not really want to pay for anything. But to list a company involves dealing with complicated regulations that make the process both laborious and expensive, says Link Mobility’s chairman and founder, Jens Rugseth.
Link Mobility will make a comeback on the Oslo Stock Exchange
– Americans know how to get paid well
Link Mobility has hired the Norwegian brokerage houses ABG Sundal Collier and Carnegie as facilitators together with the American giant Jefferies. In addition, Sparebank 1 Markets is engaged as a sales agent.
At the same time, four law firms are in the picture: Norwegian AGP and Thommessen as well as London-based Davis Polk & Wardwell and Paul Hastings in Los Angeles. Try Råd will also have a piece of the pie for communication consulting.
140 million in fees constitutes 2.3 per cent of the total transaction amount of NOK 6 billion, including share issues and share sales.
The distribution of the fee between the various advisers is not stated in the prospectus. According to E24’s experience, a Norwegian brokerage house typically needs more than ten million kroner in fees to make a profit on a traditional stock exchange listing assignment.
– The Norwegian facilitators have what I would consider normal conditions, but Americans know how to get paid well. I do not know why American lawyers feel so much more valuable, possibly because they incur a greater direct risk of being sued, says Rugseth.
The company has to pay everything
The price Link Mobility has to pay is hefty compared to another company that is on its way to the stock exchange, Norsk Sjømat, with a valuation of NOK 4.4–5 billion.
Here are DNB Markets ‘main facilitators, ABG Sundal Collier and Pareto Securities’ sales agents and Thommessen and Wiersholm’s legal advisers.
A total of NOK 615 million in new equity will be raised, and at the same time the shareholders Samherji, Bjarte Tunold and Per Magne Grøndahl will sell shares for a total of NOK 1.5–1.7 billion.
The prospectus states that Norsk Sjømat estimates to pay 20.9 million in fees to its advisers. The fee level is not directly comparable with Link Mobilitys, since the latter transaction is likely to be three times as high.
Still, there is an important difference. While Link Mobility must take the entire bill for the sale to the existing shareholders, this cost is divided pro rata between Norsk Sjømat and the selling shareholders, based on the number of shares sold and the number of new shares issued by the company.
Norwegian Seafood Manager Tommy Torvanger does not wish to comment further on the cost distribution beyond what is stated in the prospectus.
Brokerage house rides stock market wave: Remuneration party of 870 mill.
Request from main owner
Link Mobility was acquired on the stock exchange by the American investment company Abry Partners for NOK 3.4 billion in 2018. Since then, turnover and profitability have doubled, and in the forthcoming listing, Link Mobility is valued at NOK 10 billion before raising capital.
While Abry controls 78 percent, Rugseth and co-founder Rune Syversen own 13 percent in total.
These owners will consequently be responsible for most of the planned sale of NOK 3.5 billion, which can increase to NOK 4.4 billion through a so-called over-allotment option if the demand for shares is high.
According to Rugseth, the Norwegian owners had been satisfied with the Norwegian facilitators, but Abry wanted to include Jefferies to ensure a broad field of impact in the American market.
Link Mobility announced on Wednesday morning that the issue has already been oversubscribed, including the over-allotment option.
“Including Jefferies has certainly contributed to the demand among investors being so good,” says Rugseth.
– So you think it pays for the owners to end up paying such high fees?
– It’s impossible to say. Abry lives in Boston and does not have full insight into what is happening in Norway. Then it creates enough security to have an American bank, which puts a lot of work into the process, says the chairman of the board.