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: 2.10 EUR
Kursziel auf Sicht von: 31.12.2020
Analyst: Dario Maugeri, Cosmin Filker
Increase in the participation of gamigo AG to 98% agreed, purchase price with EV/EBITDA multiple of 7 very attractive, target price increased to EUR 2.10 (previous: EUR 1.90), Rating BUY
With the Ad hoc-News from February 17th, 2020 Media and Games Invest plc (MGI) has announced an increase in their stake of their most important subsidiary gamigo AG. With the acquisition of 1.05m gamigo shares, which should take place in the coming days, their participation will increase from 53% to 98%. The remaining 2% should also be acquired in the short term so that Media and Games plc will become the sole owner of gamigo AG.
According to the ad-hoc-News, the total enterprise value of gamigo AG has been set to EUR 112.0m, which corresponds to approximately seven times the EBITDA of the period 01.10.2018 - 30.09.2019. According to the 'World Tech M&A Report 2019', the EV/EBITDA multiples paid in the gaming industry amount to around 16 and are thus significantly higher compared to the gamigo-acquisition price.
The purchase price payment for 45% of the gamigo share is divided into a cash component of EUR 16.5m and an equity component of about EUR 18.2m of MGI shares. There is a lock-up period of 25 months for the MGI shares. The cash portion of the acquisition in the amount of EUR 16.5m is financed with, on the one hand, a UniCredit loan of EUR 10.0m and, on the other hand, with its own liquidity. In this regard, on February 13th, 2020 MGI announced the increase of the outstanding volume of the 7% corporate bond by a further EUR 12m to the amount of EUR 17m so that there are sufficient financial resources.
The near completed increase in the stake of the most important subsidiary should primarily lead to an improvement in the realization of synergy potential. In the future any possible consultation with the previous gamigo-shareholders will be eliminated, which will clearly shorten the decision-making process. The transaction will be noticeable in the operative figures, in particular, due to the loss of minorities. On May 30th, 2019 these still had a significant magnitude at EUR 91.37m. Since the minorities have ceased to exist, the result for shareholders will be higher.
We assumed the closing of the transaction in our DCF-valuation model with the related increase in the number of shares (post-money). The dilution effect is more than compensated for by the removal of the high volume of minority interests and, thus, on the basis of the new number of shares, we have calculated a target price of EUR 2.10 (previously EUR 1.90). We continue to give the rating BUY.
Die vollständige Analyse können Sie hier downloaden: http://www.more-ir.de/d/20121.pdf
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Date (Time) completion: 20.02.2020 (09:56 am) Date (Time) first distribution: 20.02.2020 (12:00 am)
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