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 Note

Empfehlung: Buy

Kursziel: 6.92 EUR

Letzte Ratingänderung:

Analyst: Marcel Goldmann, Cosmin Filker

Capital increase for growth financing successfully carried out;

continuation of dynamic growth course expected; oversubscribed capital

measure opens up significant inorganic growth potential; price target

lowered to EUR 6.92 (previously: EUR 7.35) due to the dilution effect that

has occurred.

Successful capital increase for consistent implementation of the M&A

pipeline

On 6 May 2021, Media and Games Invest plc (MGI) announced the closing of a

cash capital increase. Thus, in accordance with the previous company

announcement, the company has successfully completed the bookbuilding

process of the direct share placement, and resolved to issue 20,930,232 new

shares based on the authorisation granted at MGI's Annual General Meeting

on 15 April 2021. The issue price of the new shares in the direct share

placement was SEK 43 per share (equivalent to approximately EUR 4.30) and

was determined in an accelerated bookbuilding process.

The direct share placement was heavily oversubscribed and generated high

interest from both Swedish and international investors as well as existing

shareholders. The company has therefore decided to increase the direct

share placement to SEK 900.0 million (approx. EUR 89.0 million).

Upon completion of the transaction, the number of outstanding shares and

voting rights will increase by 20,930,232 shares, from 128,749,748 to

149,679,980, as a result of the direct share placement, which represents a

dilution of approximately 14.0% of the number of shares and voting rights

to the company for the existing shareholders. In parallel, the share

capital will increase by EUR 20,930,232 from EUR 128,749,748 to EUR

149,679,980.

In addition, as part of the capital measure, the company announced that

both existing and new prominent investors participated in the capital

measure. According to the company's website, for example, the following

well-known 'long-only' investors have joined the shareholder group:

Top 3 new investors shareholding in % also invested in, among others:

Janus Henderson Global Investors (UK) 5.50% Embracer, Tencent, Activision

Blizzard

Didner & Gerge Fonder (Sweden) 0.50% Embracer

BMO Global Asset Manager (UK) 0.30% Tencent

In addition, the following investors, among others, further increased their

shareholding:

Top 3 existing investors shareholding in %* also invested in, among others:

Oaktree Capital (US) 9.10% n/a.

Skandia Fonder (Sweden) 1.10% Embracer, Evolution Gaming Group,

Stillfront,EG7, MTG

Finlandia Group (Nordics) 0.70% n/a.

Following the announcement of the successful completion of the KingsIsle

acquisition in early February 2021, MGI intends to continue its growth

through the acquisition of further complementary games and media companies

or assets, as well as investing in further organic growth.

According to the company's own statements, it has an extensive pipeline of

potential acquisition targets within the games and media segments, many of

which could potentially be realisable candidates in the short term. With

the inflow of capital from the capital increase, the MGI Group intends to

strengthen its financial position in order to take advantage of these

acquisition opportunities in the short term, if necessary.

Forecasts and evaluation

As a result of the completed capital measure in conjunction with a reported

cash balance of EUR 51.70m at the end of the first quarter of 2021, MGI has

financial resources of around EUR 141.0m in our view. With this high

financial strength, we believe the company should now be in a position to

acquire two to three target companies from the M&A list (top 5)

communicated by MGI.

This would result in considerable growth and earnings potential as well as

extensive synergy effects within the group. It should be mentioned here

that the MGI management has already announced two to three acquisitions for

the current financial year. Since the completed capital measure has no

influence on our previous forecasts, which we had adjusted upwards with the

recently announced Q1 business figures, we are leaving our previous

estimates unaffected.

Should the MGI Group carry out further M&A transactions in the current

financial year following the acquisition of KingsIsle and LKQD, we will

adjust our existing forecasts and valuation accordingly. Due to the

dilution effect associated with the capital measure, we have determined a

new price target of EUR 6.92 per share and, thus, moderately lowered our

previous price target (EUR 7.35 per share). In view of the current price

level, we continue to assign a Buy rating and see significant price

potential.

Overall, we are convinced that the company will be able to continue its

successful growth strategy in the future and significantly increase

turnover and earnings. The acquisitions planned by the management for the

current financial year 2021 should increase the growth momentum to a much

higher level. This should also have a positive impact on the Group's

earnings. The acquisition of further prominent investors from the gaming

environment also supports our positive assessment that the company is on

the 'right track' to continue its successful course.

Die vollständige Analyse können Sie hier downloaden:

http://www.more-ir.de/d/22440.pdf

Kontakt für Rückfragen

Jörg Grunwald

Vorstand

GBC AG

Halderstrasse 27

86150 Augsburg

0821 / 241133 0

research@gbc-ag.de

Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR. Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,7,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter:

http://www.gbc-ag.de/de/Offenlegung

Date (time) of completion: 11/05/2021 (15:25 pm)

Date (time) of first distribution: 11/05/2021 (16:15 pm)

-übermittelt durch die EQS Group AG.-

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