(Updates with results of share placing at end of story)
Wakefield-based Team17 Group, the developer of video games and educational entertainment apps, announced on Thursday it agreed to acquire German “working” simulation games firm Astragon Entertainment GmbH for a maximum of £83 million cash.
Team17 said the deal will be funded by a placing sale of new ordinary shares in the company to raise £80 million.
“The initial cash consideration payable is €75 million (£63 million), with a further consideration of up to €25 million (£20 million) payable in cash on the delivery of EBITDA performance targets for the financial years ending December 2021 and 2022,” said Team17.
“In addition, a management incentive plan of up to €7.5 million (£6.25 million) has been established for the existing management and employees of Astragon linked to the delivery of EBITDA performance targets.
“The acquisition is not subject to regulatory approval and is expected to complete mid-January 2022.
“The vendors of Astragon are André Franzmann, Dirk Walner and FFF – Beteiligungs GmbH.”
Team17 said Astragon’s well known IPs such as Firefighting Simulator, Police Simulator, Bus Simulator and Construction Simulator “focus on non-violent cooperative gameplay with very detailed, technical, and realistic environments across PC, Console and Mobile gameplay, for millions of enthusiastic customers.”
The Wakefield firm added: “Audited results show Astragon generated c. €26 million of revenue and €5.7 million of EBITDA for the year ended 31 December 2020 and had audited net assets of approximately €13.8 million as at 31 December 2020 …
“The acquisition is expected to generate mid to high single digit accretion to EPS, based on the proposed funding structure.”
Team17 shares fell almost 7%.
On January 6, Team17 announced two cash and share acquisitions — of Hell Let Loose (HLL) IP and indie publisher The Label — with a potential total deal value of £75.6 million.
Team17 CEO Debbie Bestwick said: “We are delighted to welcome the Astragon team into Team17, and believe we are joining forces with one of the leading experts in the simulation games space.
“They have decades of game creation and publishing experience, have built an outstanding and highly devoted community and have developed an outstanding portfolio of owned IP across this genre.
“At Team17, we have always strived to build, develop and publish great content for the widest audience possible.
“With the addition of StoryToys and the expansion of our Games Label, which includes the recently acquired USA based ‘The Label’ and now astragon, we have significantly expanded Team17’s appeal to the widest ever cross section of gamers, spanning multiple genres and age groups.
“We look forward to working closely with astragon’s joint CEOs Julia and Tim and their whole team who share our ambitions to grow their own IP titles on the path to developing a leading global simulation portfolio brand as part of the Team17 family.”
Astragon CEOs Julia Pfiffer and Tim Schmitz said in a joint statement: “Team17 is the perfect home for Astragon as we enter into this exciting new chapter.
“From the first day we felt that Team17 shares the same vision for our games and understands our target group.
“Our goal is to become the number one brand in the field of ‘working’ simulation games.
“Collaborating with Team17 will enable and help astragon to evolve and focus on this strategy.
“We look forward to the possibilities that are opened up by working with what we believe to be a great partner to deliver our ambitions.”
On Friday morning, Team17 announced the results of the shares placing.
The company said: “A total of 11,010,999 placing shares have been placed by Joh. Berenberg, Gossler & Co. KG at a price of 714 pence per share, raising gross proceeds of £78.6 million for the company.
“The placing price represents nil discount or premium to the closing price on 13 January 2022 (being the latest practicable time prior to announcement of the Placing).
“The placing was well oversubscribed with considerable support from existing shareholders …
“Debbie Bestwick MBE, chief executive officer of Team17, participated in the placing and acquired 140,056 placing shares.
“Following admission, Debbie Bestwick will hold 29,294,218 shares, representing 20.26% of the shares in issue …”