LONDON, UK: Team17 has entered into a definitive agreement to acquire astragon Entertainment GmbH for a maximum cash consideration of €100 million.
The initial cash consideration payable is €75 million, with a further consideration of up to €25 million payable in cash on the delivery of EBITDA performance targets for the financial years ending December 2021 and 2022.
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 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. €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.
Acquisition is expected to generate mid to high single digit accretion to EPS, based on the proposed funding structure.
In addition, a Management Incentive Plan of up to €7.5 million (£6.25 million1) 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 £80 million.
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 is acting as sole global co-ordinator and sole bookrunner in connection with the placing.
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.”