TIDMGFIN
RNS Number : 9864E
Gfinity PLC
12 May 2017
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the
publication of this announcement via a Regulatory Information
Service, this inside information is now considered to be in the
public domain.
12 May 2017
Gfinity plc
("Gfinity" or the "Company")
Placing of shares to raise GBP6.25 million
Change to total voting rights
Gfinity plc (AIM: GFIN), a leading eSports business, announces a
placing of 31,250,000 new ordinary shares of 0.1 pence each in the
Company ("Placing Shares") at a price of 20 pence per share (the
"Placing Price") to raise GBP6,250,000 before expenses (the
"Placing").
Transaction highlights
-- Oversubscribed Placing with new and existing institutional
and other investors of 31,250,000 Placing Shares at 20 pence per
share to raise proceeds of GBP6.25 million before expenses
-- The Placing Shares will represent approximately 16.56% per
cent. of the issued share capital of the Company as enlarged by the
issue of the Placing Shares
-- The net proceeds of the Placing will be deployed for
additional working capital purposes and to:
o Launch the Gfinity Elite Series ("Elite Series") in the UK in
summer 2017 and further establish its position as a leader in the
eSports industry
o Develop proprietary software to create a new industry leading
platform for automating eSports competition management
o Invest in personnel to further enhance Gfinity's
highly-regarded team in the lead up to the launch of the Elite
Series
o Invest in broadcast technology to further differentiate
quality of Gfinity production from that of its competitors
The Placing was conducted by Allenby Capital Limited ("Allenby
Capital").
Neville Upton, Chief Executive Officer of Gfinity, said: "I'm
delighted to announce this oversubscribed Placing, reflecting
support from both new and existing shareholders and the success of
the Gfinity management to date in establishing a leading brand in
the fast-growing eSports sector. These new funds will allow Gfinity
to further invest in the Elite Series, a new "bedroom to podium"
eSports structure in UK, as well as investing further in our market
leading technology platform and personnel. Importantly, we are now
well positioned to take advantage of the opportunity presented by
continuing growth in the eSports sector and the strong reputation
that the Company has already carved out within that."
Further details of the Placing are set out below.
Enquiries:
Gfinity plc www.gfinityplc.com
Neville Upton, Chief Executive Via Walbrook PR
Officer
Allenby Capital Limited - Nominated Tel. +44 (0)20
Adviser and Broker 3328 5656
Jeremy Porter / John Depasquale
/ James Thomas
Walbrook PR (Media & Investor Tel: +44 (0)20
Relations) 7933 8780
Paul Cornelius / Sam Allen / Paul or gfinity@walbrookpr.com
Whittington
About Gfinity
Founded in 2012, Gfinity has quickly established itself as one
of the world's leading eSports companies. The London-based business
enjoys strong relationships with game publishers, players and the
wider eSports community and has already built a strong reputation
for delivering high quality competitions, both on-line and
off-line, and producing industry leading eSports broadcasts.
The Company has over 700,000 registered users, eligible to
compete in its online competitions, and stages world leading
off-line events, which see the top players in the world, across a
range of eSports titles, travel to the Gfinity Arena in London and
other locations around the world to take part in competitions,
which are broadcast on-line to millions of viewers around the
world. The Company stages events featuring a number of top video
gaming titles, across PCs, consoles and mobile devices.
The Company monetises the strong position that it has created
through a combination of sponsorship, advertising, broadcast income
relating to Gfinity's own events and through fees received for
creating and delivering bespoke events for sponsors and game
publishers seeking to engage with the eSports community.
About eSports
eSports (electronic sports) is watching or playing competitive
video gaming. Leading titles include League of Legends, Counter
Strike: Global Offensive, Defence of the Ancients 2 (DotA 2), Call
of Duty and Rocket League. The industry is growing rapidly, with
new communities developing around more and more titles. The global
eSports market generated US$325 million of revenue in 2015 and is
expected to make $463 million in 2016. The global eSports audience
in 2015 was 226 million people, 80% under the age of 35 and 70%
male (source: Newzoo). Online streaming channels Twitch and YouTube
command the biggest audiences, although eSports events are also now
being broadcast on conventional TV. The 2015 League of Legends
Championships finals in Berlin were watched by 36 million people,
with a peak concurrent viewership of 14 million viewers, while at
DotA 2's flagship annual championship 'The International 2016'
competitors from around the world competed for a prize pot of over
$20 million.
Further details of the Placing
The Company has conditionally raised GBP6,250,000 (before
expenses) by way of the Placing of 31,250,000 Placing Shares at 20
pence each. The Placing Shares will be issued on a non-pre-emptive
basis, within the Company's existing share allotment
authorities.
Background to the Placing
Gfinity has already built a strong foundation for growth and has
successfully established a strong reputation and brand within the
global eSports industry. The increased demand for eSports events
around the world and the Company's market leading position across
Europe has resulted in an acceleration of the Company's development
and a significant increase of new growth opportunities.
In a relatively short period of time, Gfinity has built a
demonstrative track record in partnering with major games
publishers including Microsoft Xbox and Activision. The Company has
also organised and managed tournaments for Forza, Gears of War,
Halo and Call of Duty.
Gfinity has recently announced its inaugural Elite Series
tournament, its wholly owned intellectual property within the
eSports sector, which over the longer term is expected to provide
multi-layered revenue opportunities in the form of sponsorship,
broadcasting rights, franchise fees and multiple ancillary
streams.
To date, the Company has focused on four principal areas of
monetisation:
-- Gfinity branded events - where the Company receives payment
for the commercial rights; including sponsorship deals and
advertising revenue from multi-national enterprises that wish to be
affiliated with the eSports demographic
-- Third party eSports events - funded by game publishers, major brands and sponsors
-- Gfinity Arena rental income - from letting the arena for
product launches, content creation and other events
-- Online competition revenue - from players of all levels who
compete on the Gfinity platform for prizes
Current Trading
Current trading is in line with management expectations. In the
first few months of 2017 Gfinity has signed up five of the eight
teams to compete in the forthcoming inaugural Elite Series,
delivered major events in London, Paris, New York and Mexico City
and secured an exclusive partnership with Microsoft for the
official global tournament for Microsoft's Turn 10 Studios' Forza
Racing Championship ("Forza RC") on Xbox.
The Board of Gfinity believes the opportunity for the Company is
now far greater than initial estimates and is committed to
capturing a significant market share as the nascent eSports market
begins to establish itself in the US and more recently across
Europe. Recent estimates from Newzoo, a global market research
company, state that the global eSports market is expected to grow
41% to $696 million in 2017 and to $1.49 billion by 2020.
Reasons for the Placing and use of proceeds
Having established a strong reputation within the eSports
industry, Gfinity is now well positioned to benefit from the
rapidly growing market opportunity. The net proceeds of the Placing
will be used to provide additional working capital and to:
-- Further establish Gfinity's position as a leader in the
eSports industry through further investment into the wholly owned
Gfinity Elite Series. The Elite Series competition has pioneered a
dynamic new format, which will allow amateur gamers the opportunity
to compete for a place in a professional team for the first time.
This new competition structure enables a unique opportunity to
offer an integrated suite of branded assets to reach, and
effectively engage with, the eSports community through both the
viewing of world class content and individual participation from
gamers at home and at the arenas. Early indicators show that
following a successful launch in UK there is significant scope to
roll-out this format internationally with the ability to capitalise
on commercial opportunities at each stage in the value chain. The
Company will utilise approximately GBP1.7 million of the Placing
proceeds to invest in these new commercial opportunities to
accelerate new long-term revenue streams such as franchise fees,
sponsorship programmes, advertising revenue, broadcasting rights
and online betting.
-- Develop an industry leading proprietary eSports technology
platform to automate eSports competition management. The Board of
Gfinity believes that Gfinity already owns and operates the best
automated eSports backend tournament builder technology in the
industry, but the current software is limited for Gfinity owned
events. The Company intends to invest approximately GBP0.6 million
of the Placing proceeds to further develop its technology to
increase usability for third parties to enable them to build their
own eSports competitions under a "white labelled" software
licensing and royalty revenue model. The opportunity to develop a
software platform to become the standard for "white labelled"
software and services to the eSports industry to "power" all types
of eSports competitions and tournaments is significant and such a
strong value proposition complements the current revenue profile
from specific events run by the Company with longer-term license
fees and royalty income. Furthermore, it is expected such a strong
technology platform will ultimately attract more gamers globally
into the Gfinity ecosystem.
-- Investment in new senior management. Approximately GBP0.5
million of the Placing proceeds will be invested in new personnel
across functions, including a Chief Strategy Officer to shape the
commercial, brand and content strategy and a Chief Operating
Officer to strengthen the Company's operations as it launches the
Elite Series. The Company will also strengthen its broadcasting
team to handle the increasing volume of live sporting events being
broadcast at future Gfinity events.
Details of the Placing
The Placing will result in the issue of a total of 31,250,000
Placing Shares, representing, in aggregate, approximately 16.56% of
the issued share capital as enlarged by the issue of the Placing
Shares. The Placing Shares, when issued and fully paid, will rank
pari passu in all respects with the existing ordinary shares of
0.1p each of the Company in issue and therefore will rank equally
for all dividends or other distributions declared, made or paid
after the issue of the Placing Shares on Admission (as defined
below).
Application will be made to London Stock Exchange for the
Placing Shares to be admitted to trading on AIM and such admission
is expected to occur on 17 May 2017. It is expected that CREST
accounts will be credited on the day of Admission as regards the
Placing Shares in uncertificated form and that certificates for
Placing Shares to be issued in certificated form will be dispatched
by first class post by 31 May 2017.
Allenby Capital has entered into a Placing Agreement (the
"Placing Agreement") with the Company under which Allenby Capital
has, on the terms and subject to the conditions set out therein,
undertaken to use its reasonable endeavours to procure subscribers
for 25,243,750 Placing Shares at the Placing Price. A further
6,006,250 Placing Shares are being subscribed for directly with the
Company, conditional, inter alia, on Admission. The Placing
Agreement contains certain warranties and indemnities from the
Company in favour of Allenby Capital. The Placing is not being
underwritten by Allenby Capital or any other person.
The Placing is conditional, inter alia, upon Admission and the
Placing Agreement not being terminated by 8.00 a.m. on 17 May 2017
(and in any event no later than 8.00 a.m. on 31 May 2017).
Substantial Shareholders
Assuming completion of the Placing, the Company is aware of the
following persons that will be interested in three per cent. or
more of the issued share capital of the Company on Admission:
Name Existing Percentage Ordinary Percentage
ordinary of existing shares on of enlarged
shares ordinary Admission share capital
shares in on Admission
issue
Charles Street
International
Holdings Limited 47,200,000 29.98% 56,575,000 29.99%
Euroblue Investments
Limited 21,295,624 13.93% 26,278,749 13.93%
Neville Upton 14,710,579 9.35% 14,710,579 7.80%
Mike McTighe 5,000,000 3.18% 6,006,250 3.18%
Two existing shareholders of the Company, Euroblue Investments
Limited and Charles Street International Holdings Limited
("Substantial Shareholders"), are subscribing for 4,353,125 and
9,375,000 Placing Shares respectively. As the Substantial
Shareholders each currently hold more than 10 per cent. of the
Company's ordinary shares, the subscriptions by them of Placing
Shares are deemed to be related party transactions pursuant to rule
13 of the AIM Rules. Accordingly, the Directors of Gfinity
consider, having consulted with the Company's nominated adviser,
Allenby Capital, that the terms of subscription to the Placing
Shares by the Substantial Shareholders are fair and reasonable
insofar as Shareholders are concerned.
Total Voting Rights
On Admission, the Company will have 188,663,570 ordinary shares
of 0.1p each in issue, each with one voting right. There are no
shares held in treasury. Therefore, the Company's total number of
ordinary shares and voting rights is 188,663,570.
The above figure of 188,663,570 may be used by Shareholders as
the denominator for the calculations by which they will determine
if they are required to notify their interest in, or a change to
their interest in, the Company under the FCA's Disclosure Guidance
and Transparency Rules.
MAR
The Market Abuse Regulations (EU) No. 596/2014 (MAR) became
effective from 3 July 2016. Market soundings, as defined in MAR,
were taken in respect of the Placing with the result that certain
persons became aware of inside information, as permitted by MAR.
That inside information is set out in this announcement and has
been disclosed as soon as possible in accordance with paragraph 7
of article 17 of MAR. Therefore, those persons that received inside
information in a market sounding are no longer in possession of
inside information relating to the Company and its securities.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCUUAWRBBAVARR
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