- Share in gamigo AG increases from 53% to 99.9%
- Purchase price is 50% below the valuation of peer group
- MGI’s market capitalization exceeds EUR 100 million
- CEO Westermann: ” Acquisition immediately creates additional value for each MGI share”
09 March 2020 – Media and Games Invest plc (“MGI”, ISIN: MT000058010101; Symbol: M8G; Basic Board, Frankfurt Stock Exchange) has increased its shareholding in gamigo AG from 53% to 99.9%. The transaction has now been successfully completed. Following the ad hoc announcement on 17.02.2020, MGI agreed with other gamigo shareholders to acquire their gamigo shares, with the result that MGI’s stake in gamigo has increased to 99.9%. If the negotiations on the purchase of the remaining 0.1% of gamigo shares fail, a squeeze-out of these shareholders will be aimed for. According to preliminary, unaudited figures, gamigo generated net revenue of EUR 59 million and EBITDA of EUR 16 million in the 2019 financial year. Over the past five years, the company has increased its revenues by an average of 31% and EBITDA by 61% per year.
MGI shareholders benefit from almost doubled profit share and efficient structure
CEO Remco Westermann: “With the complete acquisition of gamigo, MGI’s participation in gamigo’s rapidly growing profitability will almost double. The very advantageous conditions create additional value for each MGI share from day one. And last but not least, the integration will enable us to fully leverage the synergies between the companies in our group. We will simplify our structure and be able to operate even more efficiently.
Attracting new investor groups thanks to higher market capitalization and simplified structure
The purchase price of 16.5 million euros in cash and up to 18.2 million MGI shares for 46.9% of the gamigo shares corresponds to a valuation of seven times EBITDA – based on the 12-month period ending on 30 September. This means that the purchase price is only around 50 percent of the valuation of comparable companies. According to current data from E&Y Corporate Finance, gaming companies achieve an average valuation of 13.5 times EBITDA. With the up to 18.2 million new MGI shares for the acquisition of gamigo shares, which will be issued in two steps, MGI’s share capital will increase from currently 70 million euros to 88.2 million euros. A lock-up period of 25 months has been agreed for 98% of these new shares. Due to the shares (4 million shares) committed for the acquisitions of Applift and Verve Wireless Inc. as part of the purchase price, MGI’s share capital will increase to 92.2 million shares. Based on the current share price, the market capitalization of MGI will thus increase to over 100 million euros. “With our higher market capitalization and our simplified structure, we are now attractive for new groups of investors”, Westermann underscores.
Purchase price component for Applift and Verve Wireless for technical reasons via directors’ dealings
Due to the usual delay (caused, among other things, by KYC litigation) in the creation of new shares, the shares will initially be made available to the vendor of Applift and Verve Wireless Inc. via an share loan by the main shareholder and Chairman of the Board of Directors. In parallel, the new shares will be created. From this capital increase, the main shareholder will receive his shares back after the capital increase has been completed. For regulatory reasons, however, the share loan is to be announced as a directors’ dealing, with the notation “sale”. MGI has to announce corresponding directors’ dealings by principal shareholder Remco Westermann in the total amount of EUR 4.2 million. The total of 4.2 million shares are going to institutional investors who previously invested in Applift and Verve Wireless Inc. respectively and are convinced of MGI’s business model. The corresponding liabilities will be converted into MGI shares during the first half of the year, which will then be returned to the main shareholder.
Final board structure after transaction
With the completion of the transaction René Müller has announced his intention to resign from the Board of Directors as planned. He has been a member of the Board of Directors since the founding of the PLC and was significantly involved in the transition of the company to its current form. Remco Westermann: “With the full integration of gamigo into MGI, the Board of Directors has fulfilled its original promise to its shareholders, thus ending René Müller’s main mandate. We thank him for his valuable contribution”. René Müller continues to be available to MGI in an advisory capacity. The Board of Directors now consists of Remco Westermann (Executive Chairman), Tobias M. Weitzel and Elizabeth Para. In a Directors Dealing Notification, MGI also announced that Tobias M. Weitzel, member of the Board of Directors of MGI, has acquired a further 25,000 MGI shares.
The audited annual financial statement of MGI is expected to be published on 30.06.2020.
About Media and Games Invest plc:
Media and Games Invest plc, MGI, is a fast and profitable growing company in the digital media and games sectors. Through organic growth combined with value-adding synergistic acquisitions, MGI continues to demonstrate strong profitable growth. In the past 6 years, the MGI Group has successfully acquired more than 25 companies and assets. Technology is actively used to create efficiency improvements and competitive advantages. Among the most important investments are gamigo AG, ReachHero GmbH, Applift GmbH, Verve Group Inc. and PubNative GmbH. Media and Games Invest is among others listed on the Frankfurt Stock Exchange and on XETRA.
This press release contains possible forward-looking statements that are based on the current assumptions and forecasts of the company management of Media and Games plc or companies associated with it. Various known and unknown risks and uncertainties, as well as other factors, could mean that the actual results, financial circumstances, the development or performance of Media and Games invest plc and the companies associated with it may deviate significantly from the estimations presented here. Neither Media and Games Invest plc nor the companies associated with it are obligated to update this sort of forward-looking statement or adjust them to future results or developments.
Axel Mühlhaus / Dr. Sönke Knop
Telephone: +49 69 9055 05 51
Media and Games Invest plc
Sören Barz, Head of Investor Relations
St. Christopher Street 168
Valletta VLT 1467, Malta