TIDMTM17
RNS Number : 4016Y
Team17 Group PLC
13 January 2022
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS NOT FOR
RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY
OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, NEW
ZEALAND, JAPAN, SOUTH AFRICA OR IN OR INTO ANY OTHER JURISDICTION
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APPLICABLE LAW OR REGULATION.
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CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMATION,
OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE
OR DISPOSE OF ANY SECURITIES IN TEAM17 GROUP PLC OR ANY OTHER
ENTITY IN ANY SUCH JURISDICTION. PLEASE SEE THE IMPORTANT NOTICES
AT THE OF THIS ANNOUNCEMENT.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED
UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION (EU NO.
596/2014) AS IT FORMS PART OF UK LAW BY VIRTUE OF THE EUROPEAN
UNION (WITHDRAWAL) ACT 2018 (AS AMED FROM TIME TO TIME) ("UK
MAR").
13 January 2022
For immediate release
Team17 Group plc
("Team17", the "Group" or the "Company")
EUR100m acquisition of astragon
Team17, a global games label, creative partner and developer of
independent ("indie") premium video games and publisher, creative
partner and developer of educational entertainment ("edutainment")
apps for children, is pleased to announce that it has entered into
a definitive agreement to acquire astragon Entertainment GmbH
("astragon"), a well-known developer, publisher and distributor of
sophisticated 'working' simulation games based in Germany, for a
maximum cash consideration of EUR100 million (GBP83 million(1) )
(the "Acquisition").
The initial cash consideration payable is EUR75 million (GBP63
million(1) ), with a further consideration of up to EUR25 million
(GBP20 million(1) ) payable in cash on the delivery of EBITDA
performance targets for the financial years ending December 2021
and 2022. In addition, a Management Incentive Plan of up to EUR7.5
million (GBP6.25 million(1) ) 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.
The Acquisition will be funded from the proceeds of a proposed
placing of new ordinary shares in the Company to raise
approximately GBP80 million (before expenses) (the "Placing"). The
Placing is being conducted through an accelerated book building
process which will be launched immediately following the release of
a separate announcement relating to the Placing. Joh. Berenberg,
Gossler & Co. KG ( " Berenberg " ) is acting as sole global
co-ordinator and sole bookrunner ( the "Sole Global Co-ordinator",
the "Sole Bookrunner " , or the "Bank" ) in connection with the
Placing.
(1) EUR:GBP exchange rate of 1.20 as of 12 January 2022
(Bloomberg), figures are rounded
Acquisition rationale & highlights
The Acquisition of astragon is in line with the Group's existing
growth strategy and, in the opinion of the directors of the Company
(" Directors"), is expected to bring a number of benefits to the
Group, including:
-- Enables Team17 to enter a new and complementary simulation
game category, further strengthening Team17's position as a
provider of games entertainment to a broader audience.
-- Brings a strong back catalogue of evergreen owned franchises
and IP with more than 20 games developed over the last 10 years and
a solid pipeline of products in development.
-- Supported by Team17's strategic partnerships, combined with
consistent growth and commercialisation experience, astragon has
the potential to build on its existing foundations and accelerate
its current growth trajectory t o achieve its ambition to become
the global number one simulation portfolio brand for gaming.
-- The Acquisition accelerates Team17's entry into content
offering to consumers in the high-quality simulation space which
the Group believes the demand for this kind of non-violent and
cooperative entertainment games has accelerated as a result of the
COVID-19 pandemic.
-- The Acquisition brings a specialist talented team to Team17,
who will continue to operate and function as an independent
vertical within the enlarged Group whilst also delivering cross
collaboration opportunities given the core focus on creating and
publishing games within their respective genre/fields.
-- The combination of both Team17 and astragon creates exciting
commercial opportunities with a number of brands from other
industries and media partners.
-- astragon is profitable and has demonstrated consistent profit
growth of 45% EBITDA CAGR from 2017A - 2020A driven by strong
organic revenue growth of 18% CAGR from 2017A - 2020A, which was
generated from diversified revenue streams from its expertise in
development, publishing and licensing. Audited results show
astragon generated c. EUR26 million of revenue and EUR5.7 million
of EBITDA for the year ended 31 December 2020 and had audited net
assets of approximately EUR13.8 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.
Information on astragon
Founded in 1998 and headquartered in Duesseldorf, Germany,
astragon is a leading developer, publisher and distributor of
sophisticated 'working' simulation games, targeting a broad
audience from young enthusiasts to technical experts and casual
relaxed gamers.
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.
Companies with leading brands from other industries work closely
with astragon, which undertakes the translation of brand values
into engaging simulation game products for the digital domain.
The team at astragon has significant experience and
relationships with some of the world's leading vehicle brand
manufacturers, games, and media companies. The entire team will
join Team17 as part of the Acquisition and the enlarged Group will
continue to leverage their knowledge and expertise to drive future
growth.
astragon has historically demonstrated its ability to broaden
their audience with regular updates and content, new features, and
the introduction of new products and IPs. This momentum is due to
continue into 2022 and beyond, with a solid pipeline of new product
launches planned along with ongoing discussions with new key
partners.
Debbie Bestwick MBE, CEO of Team17, commented:
"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."
Julia Pfiffer and Tim Schmitz, CEOs of astragon, commented:
" 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."
Enquiries:
Team17 Group plc via Vigo Consulting
Debbie Bestwick MBE, Chief Executive Officer
Mark Crawford, Chief Financial Officer
Houlihan Lokey (Nominated Adviser) +44 (0)161 250
Adrian Reed / Paul Lines 3577
Berenberg (Sole Global Coordinator, Bookrunner
and Broker)
Chris Bowman / Toby Flaux / Marie Moy / +44 (0)20 3207
Alix Mecklenburg-Solodkoff 7800
Vigo Consulting (Financial Public Relations)
Jeremy Garcia / Kate Kilgallen +44 (0)20 7390
team17@vigocon sulting.com 0233
About Team17 Group plc
Team17 Group plc is a global provider of games entertainment to
a broad audience. It has two main verticals - a games entertainment
label and creative partner for indie developers, and a leading
developer of educational apps, targeting children under the age of
eight.
Games label and creative partner
Team17 is a games entertainment label and creative partner for
independent ("indie") developers, focused on the premium, rather
than free to play market, and creating games for the PC, console,
mobile and tablet gaming markets.
Alongside developing the Company's own games in house ("first
party IP"), Team17 also partners with independent developers across
the globe to add value to their games in all areas of development
and production and in bringing them to market across multiple
platforms for fixed percentage royalties ("third party IP").
Since foundation in 1990, the Company has launched over 100
games, including the iconic Worms, Overcooked! and Escapists
franchises, along with many more including; Yooka-Laylee, Yoku's
Island Express, My Time at Portia, Hell Let Loose, Blasphemous,
Golf With Your Friends, Neon Abyss and Moving Out making Team17 one
of the most prolific developers and diverse partners of games for
the indie market.
About astragon Entertainment GmbH
Founded in 1998, astragon Entertainment GmbH is a leading German
games developer, publisher and distributor of sophisticated
'working' simulation games, focusing on non-violent cooperative
gameplay with very detailed, technical, and realistic
environments.
astragon's internationally well-known IPs include Construction
Simulator, Bus Simulator, Police Simulator: Patrol Officers and
Firefighting Simulator. The distribution of high-quality licensed
and distribution products such as Farming Simulator and SnowRunner
complete its attractive product range. astragon games are available
world-wide on many different platforms such as consoles,
smartphones, tablets, and PC.
Visit www.team17.com for more information
The person arranging release of this announcement on behalf of
Team17 is Richard Almond, Company Secretary.
IMPORTANT NOTICES
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT
CONSTITUTE OR FORM ANY PART OF AN OFFER TO SELL OR ISSUE, OR A
SOLICITATION OF AN OFFER TO BUY, SUBSCRIBE FOR OR OTHERWISE
ACQUIRE, ANY SECURITIES IN THE UNITED STATES (INCLUDING ITS
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THIS ANNOUNCEMENT IS NOT FOR PUBLICATION OR DISTRIBUTION,
DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA.
THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE OR
SUBSCRIPTION INTO THE UNITED STATES. THE SECURITIES REFERRED TO
HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD
IN THE UNITED STATES, EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION
FROM REGISTRATION. NO PUBLIC OFFERING IS BEING MADE IN THE UNITED
STATES.
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jurisdictions other than the United Kingdom may be restricted by
law and therefore any persons who are subject to the laws of any
other jurisdiction should inform themselves about, and observe, any
applicable requirements. This announcement has been prepared for
the purposes of complying with the AIM Rules for Companies and UK
MAR and the information disclosed may not be the same as that which
would have been prepared in accordance with the laws and regulation
of any jurisdiction outside of England.
Berenberg, which is authorised and regulated by the German
Federal Financial Supervisory Authority and in the United Kingdom
is deemed authorised under the Temporary Permissions Regime and is
subject to limited regulation by the FCA, is acting exclusively for
the Company and will not be acting for any other person and will
not be responsible to any person other than the Company for
providing the protections afforded to clients of Berenberg or for
advising any other person in respect of the matters referred to in
this Announcement.
This Announcement contains inside information for the purposes
of UK MAR. Market soundings, as defined in UK MAR, were taken in
respect of the Placing, with the result that certain persons became
aware of inside information relating to the Company and its
securities, as permitted by UK MAR. That inside information is set
out in this Announcement. 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 Announcement includes statements that are, or may be deemed
to be, "forward-looking statements". These forward-looking
statements can be identified by the use of forward-looking
terminology, including the terms "believes", "estimates", "plans",
"anticipates", "targets", "aims", "continues", "expects",
"intends", "hopes", "may", "will", "would", "could" or "should" or,
in each case, their negative or other variations or comparable
terminology. These forward-looking statements include matters that
are not facts. They appear in a number of places throughout this
Announcement and include statements regarding the Directors'
intentions, beliefs or current expectations concerning, amongst
other things, the Group's results of operations, financial
condition, liquidity, prospects, growth, strategies and the
industries in which the Group operates. By their very nature,
forward-looking statements involve risk and uncertainty because
they relate to future events and circumstances. A number of factors
could cause actual results and developments to differ materially
from those expressed or implied by such forward-looking statements,
including, without limitation: conditions in the public markets;
the market position of the Group; the earnings, financial position,
cash flows, return on capital and operating margins of the Group;
the anticipated investments and capital expenditures of the Group;
changing business or other market conditions; changes in political
or tax regimes, exchange rates and clients; changes in governmental
policies, and general economic conditions. These and other factors
could adversely affect the outcome and financial effects of the
plans and events described herein. Forward-looking statements
contained in this Announcement based on past trends or activities
should not be taken as a representation that such trends or
activities will continue in the future. Subject to any requirement
under the AIM Rules, UK MAR or other applicable legislation or
regulation, neither the Company nor Berenberg undertake any
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
Investors should therefore not place undue reliance on
forward-looking statements, which speak only as of the date of this
Announcement.
Certain data in this Announcement, including financial,
statistical and operating information, has been rounded.
[1] EUR:GBP exchange rate of 1.20 as of 12 January 2022
(Bloomberg), figures are rounded
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