Nazara Technologies (NAZARA) Investor update summary

Acquisition details and strategic rationale

• Nodwin acquired a 30.5% stake in Freaks 4U Gaming for EUR 8 million in January 2024 and signed agreements to acquire the remaining 86.49% for EUR 30.3 million via share swaps, raising its stake to 57% immediately, with exclusive rights to acquire the rest from founders who continue to run the company.

• The acquisition brings complementary strengths: Freaks 4U excels in PC gaming and publisher support in developed markets, while Nodwin is strong in mobile gaming and emerging markets, enabling a global delivery model with expanded margins.

• Freaks 4U Gaming reported EUR 36.9 million in revenue and EUR 8.8 million EBITDA (unaudited) for 2023, with recent cost optimizations and expected synergies aimed at consolidating profitability in FY25.

Integration strategy and operational vision

• Nodwin's growth strategy is twofold: acquisitions in developed markets drive revenue, while those in emerging markets focus on delivery, excellence, and margin expansion.

• The company emphasizes a diversified, community-driven approach, leveraging its IPs and brands across multiple platforms and geographies.

• The integration of Freaks 4U's capabilities is expected to enhance Nodwin's global delivery, with a focus on sustainable, profitable operations rather than the loss-making models prevalent in Western esports firms.

Deal structure and founder/investor alignment

• The share swap for the 86% stake involves minimal dilution at the Singapore subsidiary, with Nodwin retaining over 75% ownership.

• The staggered acquisition structure keeps founders invested and incentivized, with the remaining 43% tied to performance targets and no additional outgo if targets are not met.

• The transaction brings prominent European investors into Nodwin's capital, supporting its vision to become a leading global youth media company.