Stillfront Group AB enters into an agreement to acquire 100 per cent shares in Moonfrog Labs

Stillfront Group AB has announced that the company has entered into an agreement to acquire 100 per cent of the shares in Moonfrog Labs Private Limited (“Moonfrog”), an independent game studio based in Bengaluru, India, focusing on Board and Social Card Games, for an initial consideration of approximately $90 million on a cash and debt free basis. The sellers are Moonfrog’s joint founders and institutional investors.

“With the acquisition of Moonfrog, Stillfront adds a highly profitable and successful studio to the group and expands our geographic footprint to the Indian Subcontinent, a strategic move into one of the fastest growing mobile game markets worldwide. Moonfrog possesses a portfolio of successful games focusing, up until today, mainly on Board and Social Card Games which are highly popular in the region. Moonfrog provides us with a proven platform with experienced talent to build upon and an exciting potential to expand other Stillfront free-to-play games into the Indian subcontinent,” says Stillfront CEO Jörgen Larsson.

THE TRANSACTION IN BRIEF

Stillfront acquires Moonfrog in four tranches, of which the first tranche of 91 per cent of the shares in Moonfrog (the “First Tranche”) shall be acquired for a consideration of $90 million on a cash and debt free basis (the “Initial Consideration”) payable in cash upon completion of the acquisition of the First Tranche.
The remaining 9 per cent of the shares in Moonfrog are acquired through a maximum of three additional tranches (jointly, the “Deferred Tranches”)
- The consideration for the acquisition of the second tranche shall be an amount equal to 1.00x EBITDA for the period 1 January – 31 December 2021.
- The consideration for the acquisition of the third tranche shall be an amount equal to 1.00x EBITDA if EBITDA is up to $20 million, and 1.25x EBITDA if EBITDA exceeds $20 million for the period 1 January – 31 December 2022.
- The consideration for the acquisition of the fourth tranche shall be an amount equal to 0.50x EBITDA for the period 1 January – 31 December 2023.
- The Deferred Tranches shall be paid in cash.
Moonfrog has a preliminary unaudited IFRS converted net revenue and adjusted EBITDA for the period 1 January – 30 September 2020 of approx. $21 million and approx. $12 million, respectively.
The Initial Consideration is equivalent of approximately 6x Moonfrog’s preliminary and unaudited adjusted EBITDA for the calendar year 2020.
The acquisition of Moonfrog provides Stillfront with an entry to the fast-growing markets of the Indian subcontinent. Furthermore, it enables substantial scaling and collaboration potential within the Stillfront Group, over long time.
Closing of the transaction is subject to customary closing conditions and is envisaged to occur on 26 February 2021.
Moonfrog will be consolidated into Stillfront’s consolidated financial reporting from 1 March 2021.

“Stillfront is one of the leading free-to-play gaming groups in the world and we are delighted to become part of the team and play an important role as Stillfront’s first game studio in the Indian subcontinent. As a part of Stillfront, we gain access to a great platform for expertise and knowledge sharing that we can leverage and learn from, while adding our own knowledge and experiences. We look forward to work together with the other successful studios in the group and continue to deliver on our vision to make mobile gaming inclusive in India and the rest of the subcontinent,” says Moonfrog co-founder and CEO Tanay Tayal.