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Modern Times Group (MTG) Has Acquired PlaySimple For Up To $510m

M&A | ANNOUNCEMENT DATE: 02 JUL 2021
WRITTEN BY | 06 Jul 2021
Modern Times Group (MTG) Has Acquired PlaySimple For Up To $510m
M&A

This article is based on our Weekly News Digest #26 from 05.07.2021. If you want to receive such analyses first, be sure to subscribe to our weekly newsletter. There, we analyze the largest deals, elaborating on the financials and strategy behind, while also covering the smaller transactions of the week.


💵 Acquisition 

  • Stockholm-based investment holding company with assets in esports and gaming Modern Times Group has acquired Indian word games developer PlaySimple for up to $510m, including:
    • $360m upfront, paid 77% in cash and the rest in Class B MTG shares
    • $150m earn-out consideration paid in cash if certain undisclosed targets are met by PlaySimple
  • According to PlaySimple’s financial performance in 2020 (Revenue of ~$83m and Adj. EBITDA of $18m), the transactions multiplies are:
Multiples With Earn-out Without Earn-out
EV/Revenue 6.1x 4.3x
EV/Adj.EBITDA 28.3x 20x

💠 Strategic Rationale

  • The acquisition clearly becomes one of the largest exits, when it comes to Indian startups. Since its inception in 2014, PlaySimple has raised a bit more than $4.5m with the latest $4m Series A round closed in Nov’16 with participation from Elevation Capital and Chiratae Ventures
  • The acquisition will help MTG to expand further and strengthen its position in the casual gaming sector. However, this is still the entirely new niche of word games for the company, which goes in line with MTG’s active inorganic growth strategy, based on acquisition across various genres and regions

🎲  Products

  • With the acquisition, MTG expands into a new niche genre — F2P word games. Currently, there are 9 live word games in the PlaySimple’s portfolio with a total of 75 million installs and 7 million MAU
  • Some of the best-performing games are Word Trip, Daily Themed Crossword, Crossword Jam, and World Wars. In 2021, PlaySimple is planning to release four new games. The company will also diversify into card games in the nearest future

PlaySimple

💵 Previous Acquisitions

  • In Mar’21, MTG has entered into an agreement to acquire New Zealand-based mobile tower defense games developer Ninja Kiwi, for a total consideration of $189m
  • In Dec’20, the company acquired an England-based mobile racing games developer Hutch was for up to $275m

  • In Jul’17, a US-based web gaming portal Kongregate was bought for $55m

  • In May’17, Germany-based browser and mobile games developer InnoGames was purchased for $90m

Sources: PRESS RELEASE

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LATER VENTURE
PlaySimple
  • Founded in 2014
  • Headquarters – Bengaluru, India
  • Founded by Siddharth Jain, Suraj Nalin, and Preeti Reddy
  • Mobile wordgames developer
Modern Times Group
  • Established in 1987

  • Headquarters – Stockholm, Sweden

  • Team of ~1000 employees

  • Founded by David Chance (Chairman) Maria Redin (President and CEO) Lars Torstensson (CFO)

  • Worldwide gaming cooperative with PC, console, and mobile expertise

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