Media and Games Invest

DE: M8G

€350.1m market cap

€2.99 last close

Media and Games Invest (MGI) is a fast-growing games and media company, following a ‘buy, integrate, build and improve’ M&A strategy. Its principal subsidiaries include gamigo (online games), ReachHero (media influencer), Applift (mobile advertising) and PubNative (mobile advertising).

Investment summary

Media and Games Invest (MGI) has announced the acquisition of US-based KingsIsle (online PC games Pirate101, Wizard101) for a cash consideration of US$126m plus a cash earn-out of up to US$84m (up to US$210m in total). FY21 guidance for KingsIsle is for revenues of US$32m and adj. EBITDA of US$21m (68% adj. EBITDA margin). The fixed cash consideration represents an EV/adj. EBITDA multiple of 6.0x, with a range of 5.8–7.3x including the earn-out. This is a major, transformative acquisition for MGI, struck at an attractive multiple (6–7x FY21 adj. EBITDA) given the high multiples seen elsewhere in the games sector. Assuming MGI can deliver similar efficiencies to previous acquisitions, there should be further EBITDA upside from the transaction, with the potential for mobile and console launches based on the IP from FY22.

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Sector
TMT
Share price graph
Price performance
%
1m
3m
12m
Actual 37.8 105.5 167.0
Relative* 35.9 91.2 161.4
52-week high/low €3.0/€0.9
*% relative to local index
Key management
Paul Echt FD
Remco Westerman Executive Chairman