Modern Times Group (MTG) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition accelerates transformation into a leading pure-play mobile gaming company, doubling size and strengthening position in Western markets with evergreen IPs and proprietary tech.

• Adds top-grossing RPG RAID: Shadow Legends and other strong IPs, diversifying and enhancing both mid-core and casual game portfolios.

• Proprietary tech platforms (Plarium Play, GoGame) and live-ops expertise offer significant synergies and operational advantages.

• Acquisition aligns with a disciplined M&A strategy, targeting category leaders and supporting long-term ambitions for growth and cash flow generation.

• Strengthens ability to execute strategy through enhanced tools, services, and operational excellence.

Financial terms and conditions

• Upfront purchase price of USD 620 million, with USD 20 million deferred to 2026 and offset by cash flow generated until closing.

• Performance-based earnouts: USD 30 million based on RAID's 2025 revenue, up to USD 170 million for 17% CAGR growth or 2028 revenue targets, total potential deal value up to USD 650 million.

• Deal financed with cash on hand and USD 460 million in new debt, with a 3-year tenor and a 1-year extension option.

• Indicative net debt/combined EBITDA multiple of 1.9x including earnouts and leasing; 1.1x net financial leverage for LTM to Q3 2024.

• Combined group expected to have 25% EBITDA margin, 67% cash flow conversion, and be strongly EPS accretive.

Synergies and expected cost savings

• Significant revenue synergies expected from leveraging proprietary tech, LiveOps, and cross-promotion, with double-digit USD million impact on revenue and EBITDA.

• Monetization and marketing improvements, platform expansion, and knowledge sharing to drive efficiency.

• Integration of Plarium Play and GoGame to accelerate platform growth and optimize user acquisition.

• Shared tools and systems to consolidate operations and realize economies of scale.

• Focus initially on revenue opportunities rather than immediate cost reductions.