Publication of inside information pursuant to Article 17 of Regulation (EU) No. 596/2014
Media and Games Invest (MGI) acquires freenet digital GmbH as part of a strategic partnership with freenet AG
August 2020 – Media and Games Invest plc (“MGI”, ISIN: MT000000580101; Symbol: M8G) today agreed to acquire freenet digital GmbH, a subsidiary of freenet AG, as part of a strategic partnership with Freenet AG. freenet digital GmbH was founded in 2000 and bundles the digital mobile entertainment offerings of freenet AG. It distributes over 1,500 mobile games via its own platforms, as well as other products in the digital entertainment sector. With the acquisition of freenet digital GmbH, Media and Games Invest strengthens its mobile games offering and expands into the fastest growing segment of the gaming industry.
The purchase price for freenet digital GmbH is in the upper single-digit million range. The purchase price will be paid in shares of Media and Games Invest and cash. The closing is planned for 30 September 2020.
In addition to the acquisition of the gaming and entertainment division, MGI and freenet AG today agreed on a strategic cooperation in the media sector, in which MGI will support freenet AG in the acquisition of new customers.
On an annual basis, management of MGI expects the acquisition to generate additional revenues of EUR 13-15 million and EBITDA of EUR 2-3 million for MGI, plus additional revenues and earnings from the media cooperation are expected.
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Media and Games Invest, a profitable and fast growing company in the online gaming and media sector, is taking over the gaming and mobile entertainment division freenet digital of freenet AG as part of a strategic cooperation. In addition to over 1,500 mobile games, the portfolio of freenet digital GmbH also includes internationally known IP’s, such as Anna Blue. With the takeover, MGI strengthens its gaming segment in the mobile games sector as planned.
MGI’s gaming segment currently generates only 1% of its revenues from mobile games, though mobile accounts for more than 50% of global gaming market revenues, with a year-on-year market growth rate of 15%. While PC and console games remain MGI’s core business and continue to grow in the global market, MGI is working on increasing its revenue share of mobile games in its own gaming segment to participate in the growth of this fast growing market. MGI has laid the foundation for customer acquisition for mobile games business with the establishment of the Verve Group.
Through the Verve, AppLift and PubNative acquisitions in the media segment, MGI has gained extensive expertise in mobile advertising. In addition, MGI now has worldwide and cost-effective access to mobile traffic due to purchasing advantages. This gives MGI a clear advantage in the highly competitive mobile games market and enables the company to leverage its extensive media reach for efficient user acquisition and to increase mobile games revenues in a cost-efficient way. With the acquisition of freenet digital GmbH, MGI significantly expands its portfolio of mobile games. In addition to further acquisitions in the mobile games sector, MGI also plans to convert parts of its existing games portfolio, such as Desert Operations, for mobile devices. The combination of a strong market position in the media sector and a broadly diversified games portfolio has now created the prerequisites to build up an extensive mobile games portfolio through organic growth and M&A, which will contribute substantially to MGI’s earnings in the short term.
In addition to the acquisition of the gaming and mobile entertainment division freenet digital, MGI and freenet AG today agreed to cooperate strategically in the media sector. In this context, MGI will in future support freenet AG in the online and mobile marketing of their offering. The cooperation between MGI’s media division and freenet AG is expected to lead to sales and earnings synergies for both parties.
In addition, it is planned that Antonius Fromme, CCE of freenet AG, shall join the Board of Directors of MGI to further strengthen the strategic cooperation.
About Media and Games Invest plc:
Media and Games Invest plc, MGI, is a fast and profitable growing company in the synergetic sectors of digital media and online games. The company combines organic growth with value-generating acquisitions. The MGI Group has successfully acquired over 30 companies and assets over the past six years. The acquired assets and companies are integrated and amongst others technology is actively used to achieve efficiency gains and competitive advantages. Media and Games Invest is listed on the Frankfurt Stock Exchange and on XETRA.
This announcement contains possible forward-looking statements that are based on the current assumptions and forecasts of the company management of Media and Games Invest plc or companies associated with it. Various known and unknown risks and uncertainties, as well as other factors, could mean that the actual results, financial circumstances, the development or performance of Media and Games Invest plc and the companies associated with it may deviate significantly from the estimations presented here. Neither Media and Games Invest plc nor the companies associated with it are obligated to update this sort of forward-looking statement or adjust them to future results or developments.
Axel Mühlhaus / Dr. Sönke Knop
Telephone: +49 69 9055 05 51
Media and Games Invest plc
Sören Barz, Head of Investor Relations
St. Christopher Street 168
Valletta VLT 1467, Malta