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UPDATE: Stillfront Group Has Completed The Acquisition Of 78% Of The Shares In Nanobit

M&A | ANNOUNCEMENT DATE: 30 SEP 2020
WRITTEN BY | 03 Oct 2020
UPDATE: Stillfront Group Has Completed The Acquisition Of 78% Of The Shares In Nanobit
M&A

💵 Acquisition

  • Stockholm-based mobile-focused games developer and publisher Stillfront Group (OM:SF) has completed the First Tranche Transaction of the agreement to acquire 100% of shares in Croatia-based mobile narrative & lifestyle games developer Nanobit for up to $148m on a cash and debt-free basis

  • The total purchase price of the First Tranche Transaction was comprised of:

    • $30m worth of Stillfront’s newly issued shares paid to Nanobit founders Alan Sumina and Zoran Vučinić

    • $70m in cash paid to all the sellers, which includes both founders as well as certain key employees

  • As a result of the First Tranche Transaction, the Nanobit founders hold together about 0.81% of the outstanding shares and votes in Stillfront, with the current Stillfront shareholders experiencing the 0.81% dilution

  • The remaining 22% of Nanobit would be acquired in a Second Tranche Transaction in 2023 for up to $48m on a cash and debt-free basis, based on Nanobit’s EBITDA development throughout FY 2021 and 2022

  • To date, Stillfront and Nanobit’s founders have entered into shareholder’s agreement, as well as a share pledge agreement, until the Second Tranche Transaction

  • The implied valuation multiples based on the 1st tranche consideration

    • EV/Adj. EBITDA multiple is 6.4x

    • EV/Adj. EBIT multiple is 7.2x

Multiples 1st tranche Total price
EV / Rev’20E 1.7x – 1.9x 2.0x – 2.1x
EV / EBIT’20E 5.6x – 7.5x 9.2x – 12.6x

*Based on Nanobit’s forecast for 2020

🧩 Strategic Rationale

  • The acquisition can be considered as a great “add-on“ to the existing powerhouse platform of Stillfront for multiple reasons:

    • broadening the addressable market with female-focused mobile games

    • entering new genres of casual mobile games — interactive stories and lifestyle simulators

    • cross-selling opportunities with the existing mobile casual audience (Storm8, Candywriter)

💸 Stillfront’s Latest Acquisitions

  • In April 2020, Stillfront acquired a US-based mobile games developer Candywriter, focusing on casual and mash-up (life simulation) games, for a total consideration of $195m

  • In January 2020, Stillfront acquired mobile game publisher Storm8, focusing on match-3 games, for $400m

  • In 2018-2019, Stillfront was also a very active acquirer. The company announced multiple M&As — KIXEYE, Playa Games, and Imperia Online

  • In a period of January — June 2020, Nanobit has a preliminary unaudited IFRS net revenue of roughly $37m and adjusted EBIT of about $7m

In $m Min Max
Net Revenue’20E 68.9 73.5
EBIT margin’20E 17.0% 22.0%

*Based on the USD/SEK exchange of 8.71 (average Aug’20)

Products

  • Nanobit is a mobile game developer and publisher with a focus on narrative lifestyle RPG for the female audience

  • Up to date, the studio has released 19 games and 10 applications with 145 million lifetime downloads

  • Most of the downloads were generated by three flagship games: Tabou Stories, My Story, and Hollywood Story

  • Nanobit saw a rapid increase in downloads during the lockdown period, with a peak of more than 6 million downloads in April 2020. In June-July 2020, the number of downloads decreased reaching ~3 million downloads

Source: Yahoo Finance — Stillfront’s share price dynamics

SOURCES: STILLFRONT

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Nanobit
  • Established in 2008

  • Headquarters — Zagreb, Croatia

  • Founded by Alan Sumina and Zoran Vučinić

  • Team of 125 employees

  • Mobile game developer and publisher with focus on narrative lifestyle RPG

Stillfront
  • Established in 2010

  • Headquarters — Stockholm, Sweden / studios in Australia, Bulgaria, Canada, Germany, Jordan, Malta, Romania, Sweden, United States and Vietnam

  • Team of 800+ employees

  • Founded by — Jörgen Larsson

  • Mobile-focused games developer and publisher