Highlights:
- MTG will through its subsidiary
MTG Gaming AB - referred to as 'GamingCo' in previous MTG announcements - acquire 100 % of the shares in PlaySimple for a total consideration of approximatelySEK 3,090 million (USD 360 million ) excluding performance based earn-outs, on a cash and debt free basis - The intention is to pay the upfront consideration 77 % in cash and 23 % in MTG class B shares. MTG will call for an Extraordinary General Meeting to resolve on the consideration shares
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PlaySimple is one of
India's leading game developer and publisher, and is one of the global leaders in the fast-growing mobile word games genre -
PlaySimple grew its revenues by 144 % in the 2020 calendar year to
SEK 706 million (USD 83 million ) with an adjusted EBITDA ofSEK 154 million (USD 18 million ). The strong momentum has continued into 2021 with estimated H1 revenues ofSEK 510-540 million (USD 60-64 million ), up approximately 82 %, and an estimated adjusted EBITDA increase of 140 % toSEK 145-155 million (USD 17-18 million ), compared to the corresponding period last year - PlaySimple has a live portfolio of nine games, including successful titles such as "Daily Themed Crossword", "Word Trip", "Word Jam", and "Word Wars" with over 75 million installs and 7 million MAU. The company also has four additional new games in the pipeline to be launched in 2021, and is expanding into the card games genre
- The company has been especially successful in reaching and become popular with the growing audience of female gamers, which today makes up close to 80 % of its total player base
-
MTG has through recent acquisitions of Hutch, Ninja Kiwi and PlaySimple materially increased its size to become a well-diversified scale player in the gaming space with pro forma revenues for MTG's gaming vertical of approximately
SEK 4,421 million for 2020 andSEK 1,158 million for Q1 2021
"We're very happy to welcome PlaySimple to our family of gaming companies. PlaySimple is a rapidly growing and highly profitable games studio that quickly has established itself as one of the leading global developers of free-to-play word games, an exciting new genre for MTG. An experienced management team and focused, data driven operating model has allowed PlaySimple to develop multiple game hits especially popular with the growing global audience of female gamers. What's more, the company has a pipeline of several exciting new games, some of which are card games, a new genre for PlaySimple.
PlaySimple's ad-tech and cross promotion competences which have played a pivotal role in their own journey can in time allow us to accelerate the growth of our whole gaming vertical. Expanding our geographical footprint into the Indian subcontinent will also provide access to one of the best talent pools in the world.
Acquisitions are a strategic part of our value creation story. Through the acquisitions of Hutch, Ninja Kiwi and now PlaySimple, MTG has built a highly attractive games portfolio that is significantly more diversified in terms of genres, audiences, and revenues, which provides improved visibility, stability and opportunities."
PlaySimple's co-founder and CEO
"We're delighted to join the MTG family - MTG's approach to investments offers us creative freedom, and the opportunities created by the GamingCo really resonate with our team. We're excited to have found a new home for our company, one where our team can learn and grow alongside our fellow companies."
Co-founders and management team members Siddhanth Jain,
"We're very proud of the games we've developed over the years, and of the infrastructure and scale that we've achieved with our team. As we join the MTG family, we look forward to leveraging our proprietary technology across MTG's gaming portfolio, expanding into the European market, investing in cutting-edge technology and building exciting new games."
Background and rationale for acquisition
The acquisition of PlaySimple marks an important next step in the build-up of a diversified gaming vertical with high-quality gaming companies and is in line with MTG's strategy to drive value creation through organic growth and strategic M&A. Scaling and diversifying the GamingCo helps to accelerate the operational performance while at the same time creating a more stable business.
The acquisition of PlaySimple is a perfect fit for MTG as it will significantly strengthen the company's position in the casual games' genre and enable access to the fast-growing word games genre. PlaySimple will strengthen MTG's position amongst the female gaming audience while also enabling access to the strategically important talent pool in
PlaySimple is one of
Following the acquisition of PlaySimple, MTG's gaming vertical has become a truly diversified global gaming group with companies across
About PlaySimple
PlaySimple (www.playsimple.in) is a developer and publisher of high quality free-to-play mobile word games and has its head office in
Today, PlaySimple has approximately 215 full-time employees and is one of
PlaySimple's most successful title to date, Daily Themed Crossword is currently the top grossing game at PlaySimple. Launched 3 years ago, it has a large archive of fun, themed crossword puzzles that entertain and challenge the company's players daily. This casual take on classic crosswords appeals to all age groups and has entertained over 11 million players worldwide. Over the years, exciting new game modes and puzzle formats have been added to keep things engaging for the players. Early backers of the company were venture capital funds
PlaySimple unaudited financials
Net revenues for calendar year 2020 amounted to approximately
MTG GamingCo unaudited pro forma financials
Unaudited 2020 and Q1 2021 pro forma figures for MTG's gaming vertical are shown below. The purpose is to provide an understanding of selected financials as if the acquisitions had been completed per
CY 2020 (SEKm) | MTG Gaming as reported | Hutch | Ninja Kiwi | PlaySimple | MTG Gaming pro forma |
Net sales | 2,682 | 639 | 337 | 763 | 4,421 |
Adj. EBITDA | 800 | 159 | 168 | 166 | 1,293 |
Adj. EBITDA margin % | 30% | 25% | 50% | 22% | 29% |
Q1 2021 (SEKm) | MTG Gaming as reported | Hutch | Ninja Kiwi | PlaySimple | MTG Gaming pro forma |
Net sales | 767 | included | 141 | 250 | 1,158 |
Adj. EBITDA | 204 | included | 75 | 65 | 344 |
Adj. EBITDA margin % | 27% | included | 53% | 26% | 30% |
Consideration and financing
MTG will through its subsidiary
Due to Indian foreign exchange regulations, the acquisition will be completed in two steps. Under the first step, which is expected to be completed on or around
The transaction is structured to align MTG and PlaySimple's long-term economic incentives and includes an earn-out component ("Earnout") which is based on PlaySimple's future financial performance in 2021-2025 payable over the same period. The total earnout is estimated at
The Consideration Shares represent 5.3 percent of the shares and 5.1 percent of the votes in MTG, on a fully diluted basis. By issuing the Consideration Shares to the selling shareholders, the number of shares and votes would increase by 6,194,343 and 6,194,343 respectively.
The up-front cash consideration paid for PlaySimple will be financed through existing cash held by MTG, a secured revolving credit facility of
Conditions and time plan for the acquisition
Completion of the first step of the acquisition of PlaySimple, where MTG will acquire 77 % of the shares in PlaySimple is expected on or around
Invitation to conference call
An audio cast conference with the opportunity for dial in participants to ask questions will be held today,
+46 (0) 856 618 467 | |
+44 (0) 844 481 9752 | |
+1 646 741 3167 | |
Std International Dial-In | +44 (0) 2071 928338 |
Confirmation Code: 6327926 - the presentation is also audiocasted "listen only" on link:
https://edge.media-server.com/mmc/p/e8pvjhiq
Advisors
MTG has appointed
PlaySimple have in connection with the Transaction appointed Aream & Co as financial advisor,
This information is information that MTG is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out below, at
For more information:
Oliver Carrà, Director of Public Relations
Direct: +46 (0) 70 464 44 44, oliver.carra@mtg.com
Follow us: mtg.com / Twitter / LinkedIn
About MTG
MTG (
https://news.cision.com/mtg/r/mtg-acquires-leading-word-games-developer-playsimple-and-discloses-pro-forma-figures-for-its-gaming-,c3378341
https://mb.cision.com/Main/56/3378341/1439964.pdf
https://news.cision.com/mtg/i/banner-dtc,c2932420
https://news.cision.com/mtg/i/playsimple-founding-team,c2932421
https://news.cision.com/mtg/i/mariaredinmtg2,c2932422
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