Sweden-based gaming holding Modern Times Group (STO: MTG-B) has acquired Israel-based multiplatform games developer Plarium from Aristocrat Leisure for up to $820m, including:
— $600m upfront and $20m deferred payment until 2026 adjusted for the cash flow expected to be generated between the beginning of Q4 and the transaction’s completion;
— $30m earn-out based on RAID: Shadow Legends revenues for 2025;
— $170m as a second potential earn-out on Plarium’s 2028 revenues, which will not be booked on the balance sheet.
The deal will be funded entirely in cash, including $460m through short-term loans and revolving credit facilities provided by DNB Bank ASA, Sweden Branch, Nordea Bank, and Swedbank AB.
| Upfront + Deferred | Base Scenario + All Earnouts considered | |
| Enterprise Value ($m) | 620 | 820 |
| EV/adj. EBITDA | 4.5x | 6.0x |
According to the press release, Plarium’s revenue is $613m for the 12-month periodending September 30, 2024, and EBITDA is $137m. The acquisition will double MTG’s EBITDA and free cash flow, with combined annual Revenue of $1.1B (SEK 12B) and adjusted EBITDA of $275m (SEK 3B). Meanwhile, Plarium’s revenue at the end of Sep’24 LTM is higher than MTG’s, and ARPDAU is 3.6 times higher.
Strategic Rationale
This acquisition is part of MTG’s strategy to grow its portfolio with evergreen mobile titles. Additionally, MTG could benefit from integrating Plarium’s proprietary tools—PlariumPlay and GoGame. PlariumPlay provides the company with a monetization opportunity by bypassing app stores, while GoGame is a marketing platform for user acquisition based on its IT platform. MTG plans to integrate Plarium’s technology stack within the group.
The deal follows Aristocrat’s consideration in May 2024 of restructuring and selling its mid-core gaming division, which included Plarium and Big Fish Games. Aristocrat Leisure acquired Plarium in August 2017 for $500m in a full-cash transaction but decided to sell the company because it did not fit its portfolio.
