Due to Indian foreign exchange regulations, the acquisition is carried out in two steps. MTG has now completed the first step and has acquired 77 % of the shares in PlaySimple against a consideration of approximately SEK 2,388 million (USD 277 million). The intention is to pay the remaining 23 % of the shares in PlaySimple against MTG class B shares. As previously announced, the consideration for 100% of the shares in PlaySimple amounts to approximately SEK 3,090 million excluding earn-out.
The second step will be completed following regulatory approval for the founders to receive the share consideration whereby the founders will receive 6,194,343 MTG class B shares (the “Consideration Shares”) in exchange for the remaining shares in PlaySimple (equivalent to a value per MTG class B share of SEK 115.16, which equals the 20 day volume weighted average price of MTG class B shares on Nasdaq Stockholm up to and including 1 July 2021, and using the FX rate USD/SEK of 8.582 as of 1 July 2021).
If founders do not obtain approval to receive the Consideration Shares by October 31, 2023, MTG will acquire the remaining shares in PlaySimple against cash consideration equivalent to the value of the Consideration Shares at such time.
MTG has on 28 July 2021 held an Extraordinary General Meeting to issue MTG class C shares that will be held in treasury. If regulatory approval is obtained, MTG class B shares (converted from class C shares) will be transferred to the PlaySimple founders in exchange for the remaining shares. If approval to receive the Consideration Shares is not obtained, they will be sold to cover the cash payment.
The up-front cash consideration paid for PlaySimple was financed through existing cash held by MTG, a secured revolving credit facility of SEK 1,000 million with a 24-month tenor, extendable up to 36 months (any extension is subject to lenders’ approval) and a bridge loan facility of SEK 1,000 million with a tenor of 12 months. Both credit facilities were provided by DNB Bank ASA, Sweden Branch and Swedbank AB (publ).
As previously communicated, the sellers may receive an earn-out purchase consideration. PlaySimple will be consolidated into MTG’s consolidated financial reporting from 1 August 2021.
For further information regarding MTG’s acquisition of PlaySimple, please see the full announcement on the acquisition made public July 2, 2021 available [here].