September 21 (SeeNews) - Swedish game developer Stillfront Group said on Friday that it has acquired 100% of Bulgarian peer Imperia Online for 10 million euro ($11.8 million) plus an earnout consideration in an aggregate maximum total amount of 17.5 million euro.
"Imperia Online fits perfectly into Stillfront's growth strategy by broadening our portfolio of studios and games with characteristics that drive long term gamer relations. Imperia Online is a leading developer and publisher with a solid and highly loyal user base," Jorgen Larsson, Stillfront's CEO, said in a press release.
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The transaction is expected to be completed around October 11.
Both the purchase price payable upon completion and the earnout will be paid 50% in cash and 50% in newly issued shares in Stillfront.
The 5 million euro, which will be paid upon completion of the transaction, are equal to 269,412 newly issued shares in Stillfront, where the subscription price corresponds to the average price per share in Stillfront traded on the Nasdaq First North exchange during the past 30 days.
The purchase price payable upon completion corresponds to an enterprise value of 2.9 times the projected EBIT of Imperia Online.
Imperia Online generated net revenue of around 4.1 million euro in January-August, with approximately 48% in operating margin.
The ultimate size of the yearly earnout component will depend on the EBIT development of Imperia Online and cannot exceed 7 million euro in 2019 and in 2020. If the earnout component exceeds 7 million euro in any of the two years, the excess will be accumulated for the next year.
The cash portion of the purchase price payable upon completion is intended to be financed by cash at hand and the cash portion of the earn-out consideration is intended to be financed through internal cash generation, Stillfront said.
"The acquisition is conditional upon certain trademarks having been duly registered with the Company between the date hereof and the date of completion of the acquisition," Stillfront noted.
Founded in 2009, Imperia Online has released 25 games and has over 45 million users worldwide. The company's flagship title is Imperia Online, a medieval Massively multiplayer online (MMO) strategy game published on both browser and mobile platforms.
($ = 0.8499 euro)