Welcome to Creaspac

It is great to, as chairman, today present the Company with the ingenious name Creaspac.

This is actually the end of a process to find an organisational form for offering a structure similar to private equity that is transparent, market-listed, addresses both institutions and private individuals, is cost efficient and also subject to Swedish tax regulation.

The process has continued for almost fifteen years.

But as said, which is more important, it is also the beginning of what we really believe will become a new effective organisational form in the capital market with Creaspac as an early actor.

The name explains quite well what it is about – a so-called SPAC (Special Purpose Acquisition Company) with Creades as sponsor. The background to the formation of the Company is that we see an opportunity to do two positive things at once;

• Offer owners of unlisted companies the opportunity to list the company in a flexible process with an experienced and committed owner on board from the first day; and
• Provide an opportunity for all types of investors – institutions as well as private individuals – to together with Creades as founder become long-term owners of a successful company by subscribing for shares in the Company at the same price. A price without premium or high fixed fees. Thereafter, Creades has a certain upside through so-called Sponsor Warrants, but only if it succeeds in delivering a clearly defined surplus value to all of Creaspac’s shareholders.

In Creaspac, Creades’ investment organisation will identify and propose potential acquisition targets. This will not entail charting unknown territory, the companies that will be analysed are similar to those that are already being evaluated, but with the opportunity to make a larger transaction than previously possible within Creades. This provides the advantage to, in addition to being able to make larger transactions, for example, be able to offer fast-growing companies a significantly larger capital injection in order to increase growth.

Creades’ investment organisation has for a long time, very profitable, investing in companies and situations on both the listed and the unlisted market. Some clear examples are Avanza (founder), Tink, StickerApp, Klarna, Inet, Apotea, Lindab, Instabox, Addnode, Embracer and Midsona, and a new exciting investment in PriceRunner was recently announced. In addition to its own generation of ideas within the organisation and the network, there is also a very strong flow of investment proposals, and I suspect that there will not be less with Creaspac as a new tool.

Creades has over the years been a long-term owner in many companies such as Avanza, Tink and Apotea, and through the proposed structure it has an incentive, and also a clear intention, to be a long-term owner in the company that Creaspac intends to acquire. As a committed owner it has, together with the management, been very involved in the value creation of the companies invested in.

The strategy has been good for Creades’ shareholders. During the last five and nearly ten[1] years, respectively, the total compensation to the shareholders (through share redemption, dividends and share price development) has increased by 49 percent and 31 percent respectively per year, which is significantly better than the stock exchange development (OMXSGI) for the same period (17 percent and 16 percent respectively).[2]

It is also very gratifying to have been able to involve such an experienced, versatile and skilled board of directors to the Company. The board of directors has breadth and knowledge that will be of great benefit when investment proposals are being evaluated.

Creaspac’s management will continuously present investment ideas to Creaspac’s board of directors, which can be said to act as an investment committee that also selects acquisition proposals to be presented for decision at a general meeting in Creaspac. At such meeting, the Company’s shareholders have to decide whether or not the acquisition should be completed. This is a wonderful direct democracy that is not offered by private equity companies or venture funds, and this model also allows for participation at a significantly lower cost than is usual in the industry.[3] Creaspac also has more positive aspects compared to these alternatives: the Company is completely transparent in terms of operations and costs, investors are offered a liquidity in line with the original investment and the structure is in the form of a ordinary Swedish limited liability company without complicated management companies with addresses at law firms in the English Channel or the Caribbean.

As I am also the chairman of Creades, who has taken the initiative for this new Company, I will take the liberty to comment on this opportunity from Creades’ point of view as well. For a long time, we at Creades have felt that we often have more ideas than capital, which is why it has been natural to look at how we could make larger transactions. We have therefore looked at the SPAC phenomenon, but considered that the American model is too focused on fast deals and has partly turned to a group of investors that sees the investment as a speculative option or an arbitrage. Through Bure’s initiative, a Nordic model is now crystallising aiming long-term value creation through business development together with like-minded institutions and private individuals, and we belive that the model is very interesting and suitable for both Creades and the Swedish capital market. 

I am very much looking forward to this exciting journey where we have all the prerequisites to carry out an interesting, long-term and, not least, profitable acquisition within the framework of Creaspac.

I hope you want to join us on the journey!

 

Sven Hagströmer
Chairman of the board of Creaspac AB

 

[1] Estimated since 23 January 2012 until 30 April 2021.

[2] Data retrieved from Bloomberg’s database in April 2021.

[3] Usually, venture capital companies and venture funds operate with a management fee of about 1.5-2.0 percent and additional variable remuneration (so-called carried interest) based on achieved returns. Creaspac has a cost-effective structure without employees with ongoing costs of approximately 0.3 percent of the net asset value, where certain management and investment services are provided by Creades and where some dilution arises if Creades chooses to exercise their Sponsor Warrants, given a return exceeding 7.5 percent per year from the day after the general meeting has approved an acquisition.