DGAP-Adhoc

Correction of a release from 16/01/2021, 00:26 CET/CEST - Media and Games Invest entered into an agreement to acquire KingsIsle Entertainment Inc. for USD 126m plus earn-outs. In this context, Oaktree is subscribing for a EUR 25m share issue. - Seite 3

• The Transaction is in line with MGI's defined strategy of seeking highly accretive acquisitions which will strengthen the long term profitability and help to create a stronger position in online PC and mobile games.
   
• FY 2021 revenue guidance for KingsIsle comprises expected revenues of EUR 25 million ("Revenue Guidance") and an expected adjusted EBITDA of EUR 17 million (the "EBITDA Guidance"). The resulting 68 percent EBITDA margin is expected to be achieved by combining the attractive size of the games with MGI's highly efficient cost structure.
   
• MGI's combined group EBITDA margin grows on a pro forma Jan - Sep 2020 basis from 21 percent to 28 percent post the Transaction. Given the strong track record of Wizard101, we expect to generate higher & more stable cash flows from the free-to-play model with the loyal communities for existing IPs.
   
• The fixed Cash Consideration of USD 126 million represents an EV/EBITDA multiple of 6.0x based on the EBITDA Guidance. The Transaction is immediately accretive for the MGI shareholders based on this multiple combined with an expected increase of EPS.
   
• Taking into account the Earn-Out Consideration, the EV/EBITDA multiple may increase to a range of 5.8x - 7.3x of the EBITDA Guidance. This assessment is based on an increased EBITDA and includes the incremental EBITDA that may occur from a higher revenue base should an earn out become payable.
   
• Post transaction, the net leverage ratio is at the upper end of the stated target range of 2-3x, while the lower end is planned to be reached within 12-18 months due to stronger Free-Cashflow generation combined with an increasing EBITDA.
   
• The Total Consideration on a cash- and debt- free basis is divided into a fixed component comprising four installments totalling $126 million and three earn out levels which could result in $84 million of additional payments:

Closing Consideration Payment

• USD 63 million will be paid at the closing of the Transaction

Deferred Consideration Payments

• USD 25,2 million will be paid in cash on or before 30 June 2021,
• USD 12,6 million will be paid in cash on or before 31 December 2021 and
• USD 25.2 million will be paid in cash on or before 30 June 2022

Earn Out Consideration Payments