10 Jan — 16 Jan / 2022

Weekly News Digest #3


# of announced deals
announced deals’ size
# of closed deals

Team17 acquires Astragon for up to $114m


Team17 acquires Astragon for up to $114m

Team17 Astrogon

UK-based multiplatform games publisher and developer Team17 (LON: TM17) has entered into an agreement to acquire German PC&console games developer Astragon for up to $114m (€100m), including:
— an initial consideration of $85.5m paid in cash;
— an additional earn-out consideration of up to $28.5m in cash, based on the agreed EBITDA targets for 2021FY and 2022FY.

Additionally, Team17 will provide an incentive plan of up to $8.6m for management and employees, depending on agreed EBITDA targets.

Team17 will finance the deal with ~$109m (£80m) private placing of shares. The transaction is not subject to further regulatory approval and is expected to be closed in mid-Jan ’21.

Strategic Rationale

Founded in 1998, Astragon Entertainment is a games developer and publisher, known for its simulation PC&console titles, including Firefighting Simulator, Police Simulator, Bus Simulator, and Construction Simulator. Acquiring Astragon, Team17 significantly expands its simulation games portfolio with well-established IP, which includes 20+ games developed over the last 10 years.

Moreover, Team17 believes that during the pandemic the demand for such non-violent cooperative games is especially high. Operating independently, Astragon will continue to work on the simulation genre using new cross-collaboration opportunities within the Team17 group.

Astragon is a profitable company that demonstrated a 45% EBITDA CAGR during the 2017-2020 period, driven by 18% Revenue CAGR from 2017-2020. Based on the company’s financial performance in 2020 (Revenue of $29.7m and $6.7m of EBITDA), the transaction multiples are 3.8x EV/Revenue and 17x EV/EBITDA. The deal is expected to generate mid to high single-digit accretion to EPS, based on the proposed funding structure.

Considering Team17’s trading multiplies —12.2x Market Cap/Revenue and 34.6x Market Cap/EBITDA* — the deal will definitely be accretive for the company.

Team17’s strategy

This is already the third acquisition the company has announced this year. Last week, Team17 purchased Hell Let Loose IP for up to ~$62.4m in cash and shares (~$42m initial consideration and ~$20.4m an earn-out based on 2 years performance) from Australia-based indie games publisher and developer Black Matter, and acquired US-based indie publisher The Label for up to $40m in cash and shares ($24m initial consideration and possible earn-out of up to $16m based on 3 years performance).

For comparison, we saw only one M&A deal from the company in 2021. In Jan’21, Team17 purchased all rights and assets for Golf With Your Friends IP from Blacklight Interactive for a total consideration of up to ~$16.5m. In 2020 the story was similar — only one $1.8m acquisition of Yippee Entertainment during the year.

It seems like Team17 has joined the M&A game and we may expect more deals from the company this year. Considering the company’s diversified portfolio of 90+ games developed by independent studios, one might arguably assume that Team17 may take under its wing its long-standing partners to solidify its position on AA and indie games markets. We can observe the same strategy from tinyBuild (LON: TBLD), another indie games company with strong M&A activity (7 deals in 2021). Considering the recent lack of new AAA games and the growing number of postponed releases, it is arguably one of the best periods for AA and indie games, which has been experiencing an increased interest from the gaming community.

*According to S&P Capital IQ

This InvestGame Weekly Digest is supported by Hiro Capital, investors in the future.



German-based software developer Maxon announced the acquisition of all assets of US-based software developer Pixologic most known for ZBrush — sculpting and painting software. The entire team behind ZBrush already joined Maxon, increasing its capabilities, especially when it comes to 3d modeling and drawing.

UK-based app management platform Airnow acquires Spain-based mobile growth services provider Lab Cave. The financial terms of the deal are not disclosed, but Lab Cave will focus on the App Store platform’s optimization for mobile game developers.

US-based blockchain solutions for game publishers company Forte acquires a US-based platform for creating, publishing, and scaling mobile games N3TWORK. Neil Young, Co-founder and CEO of N3TWORK, will lead Forte’s Games Industry business unit. The game development teams from N3TWORK will form a new independent games company — N3TWORK Studios, which will build and operate a diverse portfolio of titles, including its new multiplatform Legendary Heroes Unchained, and its upcoming Triumph mobile game.

US-based gaming company with a focus on bringing games from the 80s, 90s, and early 2000s to modern gaming platforms Ziggurat Interactive acquires more than 80 titles from German-based games developer Rainbow Arts — creators of a number of 8 and 16 bit games including such titles as Rendering Ranger: R2, and X-Out. The financial terms of the deal are not disclosed. As a result, Ziggurat will significantly increase its games library and is looking forward to bringing classic games from Commander-64 and the PC era of the 80s to modern players.


US-based blockchain-powered startup Fan Controlled Football has raised $40m in Series A funding. Animoca Brands and Delphi Digital led the round with participation from others. Funding will be used for further company growth and for the second season of their live-NFT based football game, where players use tokens for voting and actions in the game.

Finland-based no-code game developer Yahaha Studios has raised $50m in 3 rounds of funding nearly 2 years ago, however, the information was revealed just a few days ago. The company is still 6 months before its official launch. The main product is a new platform for creators to build immersive games developed in partnership with Unity.

Dubai-based esports company Galaxy Racer has revealed its plan to invest ~$10m into the Malaysian esports ecosystem. The company plans to arrange esports competitions and events in the region, and establish a new HQ in this area. The investments will be distributed within the next 5 years, and the country’s government is supporting the project.

India-based gaming startup Turnip has raised $12.5m in Series A funding. Greenoaks and Elevation Capital co-led the round with participation from the others. The funding will go towards the development of a mobile gaming community platform.

US-based online chess platform announced a major investment from US-based equity firm General Atlantic. Parties have not disclosed the amount and terms of the deal. The investment will be used for further platform growth. After Netflix’s show Queen’s Gambit the interest in chess has significantly increased, and aims to build the biggest chess community.