MY.GAMES Acquires DeusCraft For Up To $49m

💵 Acquisition

• MY.GAMES, a gaming division of Mail.ru Group, has acquired the controlling stake in the mobile game development studio DeusCraft and became the owner of 51.16% shares of the Target

• Maximum transaction price accounts for $49.1m, including:

  • $14.1m upfront consideration

  • up to $35m earn-out consideration to be paid in April 2021, if the company’s monthly revenue is about $15m as of Q1 2021

• The deal is performed by the participation of MGVC, the investment arm of MY.GAMES, and is expected to close in October 2020

• The consolidation of the company is expected to have a slight negative impact on MY.GAMES EBITDA in 2020 due to the heated development process of two new mobile titles

🧩 Strategic Rationale

• The consolidation perfectly fits MY.GAMES strategy to become a top-25 games company in the world, with growing M&A activity being a part of it

• MY.GAMES will be able to benefit from the expertise of DeusCraft’s team, which has a vast background of experience in the development of casual mobile games (15+ years) especially when it comes to the new time management genre

• As for Deus Craft, the studio will be able to grow and expand globally, using the marketing and analytical expertise of MY.GAMES

🎲 Products

• DeusCraft is a casual mobile games developer behind such titles as Grand Hotel Mania, Game of Evolution: Idle Clicker and Merge Life, Dress Up Fever, Battle Instinct, and others

• The company is best known for its Grand Hotel Mania game, which was released in January 2020 and by now has been downloaded more than 4.1 million times with a peak of 1.7 million downloads in August. Most of the downloads came from the U.S. market

• Combined, all the games of the company has been downloaded about 6 million times

• Currently, Deus Craft is working on two new titles that are expected to be released within the next 12 months

💸 MY.GAMES M&A Activity

• In March 2020, MY.GAMES acquired control over mobile games developer InGame. MY.GAMES has also invested in Reaction Games and US-based Hypematers

• Over the course of 2019, the company had 7 acquisitions, with 2 of them being gaming related:

  • In May 2019, the control in mobile games developer Panzerdog, known for tactical shooter Tacticool

  • In July 2019, the control in mobile games developer SWAG MASHA, known for interactive story game Love Sick

• Over the course of 2018, the company had 4 acquisitions, with 2 of them being gaming related:

  • In January 2018, MY.GAMES acquired an esport group of companies operating under the ESforce brand

  • In April 2018, the company acquired control in mobile games developer BitGames

• Over the course of 2016, the company had 3 acquisitions, with 1 of them being gaming related:

  • In October 2016, MY.GAMES acquired 100% of the mobile games developer Pixonic

SOURCES: Mail.Ru Group, LSE