Intervju med tbd30s VD Anders Lönnqvist & CFO Caesar Gezelius
Q. tbd30 is a newly founded SPAC – who are the people backing tbd30?
Anders: That’s correct, tbd30 was founded in March 2021 at the initiative of the sponsors Anders Böös and myself. During the spring, we established the board of directors with Ingrid Bonde, Ulrika Hagdahl and Lars Wedenborn and the executive management with me as CEO and Caesar Gezelius as CFO.
The Board of Directors and the management have together over 160 years of experience of investment and business development in many different industries and sectors. I would confidently say that the Board of Directors has a proven record of value creation for shareholders in both listed and private environments.
Q. What does tbd30 want to do?
Anders: tbd30 is a SPAC which intends to carry out a business combination in the Nordic countries in the business services sector. Business services is a broad concept but we have defined ourselves more narrowly We want to find a company that provides clear added value, has a strong market situation, and operates in a sub-segment with good organic growth. We have also added on some company-specific criteria to make the search process even more stringent.
Q. What are these criteria?
Anders: The company must have a strong management, an established track record, and have a scalable business model where growth can provide improved margins. The revenue model shall in all essentials be based on contracted and recurrent revenue. Digitalization of important work processes must be a central part of operations. There must be potential for growth through business combination and for further development of the business. The company must have a well developed sustainability strategy and documented ethical guidelines.
Q. Why have you decided to focus on business services?
Anders: We know the sector well after having been committed to and operated in many companies working with business services. Many services companies have been able to cope with turbulent financial periods and demonstrated a good power of resistance. The sector has also developed over time with new business and revenue models, including through digitalization. Furthermore, the number of companies in the sector on the stock exchange is relatively low. It is quite simply an exciting sector to invest in.
Q. Is there any segment that you avoid?
Anders: Yes, we won’t invest in business services whose activity requires large balance sheets, banks being a typical example. We won’t either invest in companies requiring heavy investment or in companies linked to the public sector, such as social services, education or health care.
Q. Is there a risk that of you being less stringent about the company you purchase when the end of the 30-month period approaches?
Anders: Our aim is to create a sufficiently strong pipeline to minimize the risk of running out of time. Furthermore, a Business Combination must be approved by a majority of the shareholders at an extraordinary general meeting.
Q. How will you carry out a business combination?
Anders: We are now accelerating the process of identifying a target company which complies with our criteria where we can benefit to a great extent from the experience and networks of the Board of Directors and management. When a potential target company has been identified, we will make a thorough evaluation of the company. We can contribute our expertise for a smooth and fast IPO compared with a traditional IPO which is often more dependent on the state of the market.
Caesar: Moreover, a target company can continue to focus on its own activities, rather than a long—drawn-out IPO. The actual business combination is expected to be carried out as a non-cash issue where the target company’s existing owners remain as owners and want to assist the company to take the next step in its development. This also means that tbd30 can operate in a wider range when it comes to capitalization, with a benchmark between SEK 2- 5 billion.
Q. What are investor warrants?
Caesar: tbd30 has two kinds of investor warrants – series II and series III. Series II is issued to those holding class A shares on the record date. Shareholders receive a non-chargeable investor warrant of series II for each share. Four warrants entitle the holder to subscribe to one new share in tbd30 at a subscription price of SEK 115. This may be regarded as a supplementary yield which can almost be compared with interest.
Investor Warrants of series III are issued to those holding Class A shares when tbd30 has completed a business combination. For each share, shareholders receive a non-chargeable investor warrant of series III. Four warrants entitle the holder to subscribe to one new share in tbd30 at a subscription price of SEK 115.
Q. What’s the procedure for redemption of shares?
Caesar: Shares can be redeemed in two ways. If we have not succeeded in carrying out a business combination by the outcome of 2023, the subscribed amount (SEK 100/share) will be reimbursed to the shareholders.
The second way is in the event of you as a shareholder not agreeing with the Board’s proposal on business combination at an extraordinary general meeting. Then you quite simply vote no and hereby redeem all of your Class A shares at the subscribed amount (SEK 100/share).
To ensure this, 100 per cent of the issue proceeds from the sale of Class A shares are paid into a blocked bank account at DnB. The operation of the company until a business combination has taken place is financed wholly by the risk capital of approximately SEK 40 million which the sponsors, the Board of Directors and the management have previously invested in tbd30.
Q. You bear the ultimate risk – why?
Anders: This is correct. If no business combination takes place, the risk capital of up to SEK 40 million will be lost while the investors will have the subscribed amount (SEK 100/share) reimbursed. But we have a strong belief in our business concept and our capacity and ability to carry out a business combination with a target company and contribute to continued development of the target company. To further demonstrate our conviction, the company’s sponsors will invest SEK 30 million each on the same conditions as other shareholders in the coming new issue. This means that the sponsors, the Board of Directors and the management together invest a total of SEK 100 million in risk and investor capital.
Q. Have you checked interest among other participants in the market?
Anders: It is always important to include institutional and major investors in new issues and IPOs. This provides a long-term perspective and better stability. We are therefore both glad and satisfied that the Roos group, Lannebo Fonder, Carnegie funds, Skirner, Nordic Cross, Norron, Per Josefsson Invest, and Robur among others have shown their confidence in us by participating in the coming new issue.
Q. What time perspective do you have for your commitment and investment in tbd30?
Anders: We have defined the criteria for target companies in accordance with the strengths we have on the Board of Directors and management, and our goal is to make use of these after the completed business combination. We will help a target company develop in its new phase on the stock exchange. In addition to this aim, we also have a so-called ”lock-up” of 365 days after a completed business combination which means that we cannot divest our holding during that period.
Q. What opportunities do I have as an investor?
Anders: To subscribe and purchase a share in tbd30 enables the general public to participate from an early stage in a market that is normally reserved for private equity companies. As an investor, you also have an opportunity, if you don’t think the Board’s proposed business combination is a good idea, to quite simply vote against it and have the subscribed amount (SEK 100/share) reimbursed.
Caesar: If you participate in the initial offering, you can then wait and receive series II Investor Warrants about 35 days after the IPO, and series III Investor Warrants when tbd30 has completed a business combination. As these warrants will be traded on Nasdaq, you will also be able to trade with one or more of these instruments and thus participate in our process in the way that suits you.