Zordix AB (publ) (“Zordix” or “the Company”) has entered into an agreement to acquire 100 percent of the shares in the French gaming publisher and game distributor Just For Games SAS (“Just For Games” or “JFG”). The purchase price amounts to a total of EUR 14 million and will be paid partly in cash and partly in the form of newly issued Series B shares in Zordix. The financing is partly conditional on a decision by an Extraordinary General Meeting.
The transactions in brief
● Zordix has today entered into an agreement to directly or indirectly acquire 100 percent of the shares in the French gaming publisher and game distributor Just For Games.
● The purchase price amounts to a total of EUR 14 million on a cash and debt-free basis, with an adjustment for normalized working capital. The purchase price consists of a cash portion of EUR 9.25 million and a share portion in the form of newly issued Series B shares in Zordix to a value of approximately EUR 4.75 million.
● The cash part of the purchase price shall be financed through a directed new issue, which the Board intends to conditionally decide upon, following the subsequent approval of an Extraordinary General Meeting.
● The part of the purchase price to be paid in the form of Series B shares in Zordix will be paid through an issue in-kind to the sellers of Just For Games, for which the Zordix Board intends to propose an Extraordinary General Meeting to authorize the Board to decide on.
● Remuneration shares in connection with the transaction have a lock-up period of eighteen (18) months.
● The transaction contains a variable additional purchase consideration that is based on EBITDA outcomes for the years 2021, 2022 and 2023. The total value of the additional purchase consideration is limited and paid out at a minimum of 40 percent in Series B shares. Series B shares issued in connection with additional purchase consideration will be subject to lock-up for up to a maximum of twelve (12) months.
Background and rationale
Just For Games is a leading French game distributor and publisher of games for PC and consoles. JFG distributes primarily in the premium segment and in close collaboration with international gaming publishers such as Microsoft, Maximum Games and Marvelous. Furthermore, JFG holds one of the largest game catalogs of Nintendo Switch games in France, and is the third largest player in Nintendo Switch game distribution. In addition to distribution, JFG owns a publishing business that has grown rapidly since its inception two years ago, and currently accounts for about 1/10 of sales. The publishing business has already established itself as number one in physical game sales within the back catalog. Just For Games is based in Paris and is made up of twelve employees.
The acquisition of JFG is a major step forward in Zordix’s strategy to expand globally, and the transaction opens up for further acquisitions, both within publishing and game development. JFG strengthens Zordix’s existing publishing activities and diversifies its operations. It is a transformative and complementary acquisition that strengthens finances and creates stability as well as room for continued growth.
“I am delighted to welcome Philippe and the whole team at Just For Games to the Zordix family today. Just For Games is an impressive entrepreneurially driven company with a top three leading distribution position in France, and a rapidly growing publishing branch. The company’s ability to grow by 30 percent each year is world class! Just For Games is an important step in Zordix’s ambition to deliver games throughout the whole value chain, from idea to market. This significantly sized acquisition creates a stable foundation for continued expansion, in which 2021 will be a very active year for us.”, says Matti Larsson, founder and CEO of Zordix.
Preliminary unaudited figures for the period January 1st, 2020 to December 31st, 2020 are presented below.
● JFG has grown by approximately 33 percent on an annual basis since its start in 2011.
● Sales for the period amounted to EUR 29.8 million, an increase of 30 percent compared with the same period last year.
● Of total sales, 89 percent consists of distribution activities, 10 percent of publishing activities and the rest of development activities.
● Distribution operations increased by 19 percent in 2020 compared with 2019, while publishing operations increased by 430 percent in 2020 compared with 2019.
● JFG’s profit before net interest income, tax, depreciation and amortization (EBITDA) for the period amounted to EUR 3.9 million.
● JFG’s profit before net interest and tax (EBIT) for the period amounted to EUR 3.9 million.
● The acquisition results in a group with pro forma LTM Q3 2020* sales of approximately SEK 330 million, EBITDA of approximately SEK 45 million and EBIT of approximately SEK 43 million.
*) Preliminary unaudited figures for JFG for the period October 1st, 2019 to September 30th, 2020 are presented for the purpose of describing a hypothetical situation as if the transaction had been completed as of October 1st, 2019. No synergy effects or integration costs have been taken into account in these figures. Presented financial information should not be considered an estimate for the current year, or the next twelve months. JFG has EUR as its reporting currency.
“This transaction marks the culmination of 10 years as an independent company, as well as the beginning of an exhilarating growth journey as part of the Zordix family. The whole Just For Games team, as well as myself, are very excited about combining forces and working alongside a highly talented Zordix team with long-standing experience in the industry.” says Philippe Cohen, founder and CEO of Just For Games.
Purchase Price and Lock-Up Period
The purchase price amounts to EUR 14 million on a cash and debt-free basis, and with an adjustment for deviation from normal working capital. The purchase price consists of a cash part of EUR 9.25 million and a share part in the form of newly issued Series B shares in Zordix to a value of approximately EUR 4.75 million. The Board intends to decide on a private placement in order to finance the cash part of the purchase price (the “Private Placement”). The decision on the Private Placement will be conditional upon the subsequent approval of an Extraordinary General Meeting. Remuneration shares received by the seller in connection with the transaction have a lock-up period of eighteen (18) months.
For further information, please contact:
Matti Larsson, CEO,
Phone: +46 706 54 95 41
Zordix is a multinational game developer and publisher headquartered in Umeå, whose business concept is to develop and release games for consoles and PCs on the global market. Acquisitions of other companies, long-term investments in its own IPs and investments within the framework of its own publishing operations are the main ingredients in Zordix’s growth strategy. The group as a whole has over a 25-year period participated in over 60 launched games on a world market and today consists of three studios that develop games under their own brands, and a publishing arm. Zordix Racing is developing new technology and new games in a project with the working name Thunder. Dimfrost Studio develops Nordic fantasy in Bramble: The Mountain King. Invictus Games is working on a number of new projects, of which the racing part for the next game in the series Flåklypa Grand Prix is one. Zordix Publishing publishes its own games as well as games developed by external studios and launches them globally.