Original-Research: Media and Games Invest plc - von GBC AG
Einstufung von GBC AG zu Media and Games Invest plc
Unternehmen: Media and Games Invest plc ISIN: MT0000580101
Anlass der Studie: Research Comment
Kursziel: 1.90 EUR
Kursziel auf Sicht von: 31.12.2020
Analyst: Dario Maugeri, Cosmin Filker
Acquisition of the main assets of the mobile marketing specialist Verve Wireless Inc. brings high potential synergies, high acquisition activities continue, outlook and target price confirmed
The Media and Games (MGI) subsidiary gamigo AG announced on January 23rd, 2020 the acquisition of the main assets of the North American Verve Wireless Inc. (Verve), which continues the high M&A activities of recent years. Verve is a provider for location-based programmatic video and display marketing and has a well-known customer base (including: BMW, Mc Donalds, Pepsico, Unilever. etc.). On the other hand, the company, which is active in New York and San Diego with a broad network of well-known publishers, ensures the spread of marketing activities.
With the integration of Verve, gamigo and Media and Games Group benefit from established customer contact, both on the sales side and publisherlevel. Particularly, the two B2B subsidiaries, PubNative and Applift, which are active in the field of mobile marketing, have high synergy potentials. Both companies are currently not active in the USA, so Verve should enable existing activities to expand into this largest advertising market. On the other hand, Verve could benefit from the global orientation of the two companies. Additionally, the B2C area could also benefit from the Verve acquisition. This should give the gaming subsidiaries additional expertise in customer acquisition and increase their know-how in mobile applications.
According to DGAP-news from gamigo AG, it is expected that the acquisition will generate extra income in the low single-digit million range. In our view, this should mean a sales volume of approx. EUR 10 - 13 million. Although Verve does not yet generate positive results, gamigo management is confident that it will quickly bring the company to profitability. Large potential savings are expected from the organizational integration within the gamigo cloud alone. An additional reduction in the high personnel costs should then lead to an overall EBITDA contribution in the low single-digit million ranges (approx. EUR 1-2 million according to GBC's interpretation).
We expect the purchase price to be roughly at the level of sales, between EUR 10 and EUR 13 million. In view of the gamigo group cash-holding of EUR 20.9m, which was last published on September 30, 2019, the purchase price payment should be easy to make.
The acquisition of Verve is to be seen as the continuation of the previously high M&A activities, which we have assumed in part as the basis for revenues and the earnings growth for the coming financial years. Therefore we hold unchanged our previous forecasts compared to our most recently published research study (see study from November 11th, 2019). Based on the unchanged price target of EUR 1.90, we continue to give a BUY rating.
Die vollständige Analyse können Sie hier downloaden: http://www.more-ir.de/d/20065.pdf
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Date (Time) completion: 12.02.2020 (09:09 am) Date (Time) first distribution: 12.02.2020 (11:00 am)
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