Today Stillfront Group announced the acquisition of the German-based Goodgame Studios for a total consideration of EUR 270m. The company currently has more than 340 million registered users and a vast amount of active players. The purchased is financed through a tap issue of SEK 390m of Stillfront’s corporate bond loan and 16.87 million new shares to the founders of Goodgame, which is also the CEO and CSO. The purchase is a massive one, and the fit between the two companies seems almost perfect. We have updated our financial projections and the capital structure following the deal. We see significant value in the deal and view the price tag at almost a bargain level for this kind of company. We raise our Estimated Fair value, in Base-case, to 248 (173) per share. We expect that the combined Group will produce net sales of SEK 1529m and EBIT of SEK 312m during 2018, with increasing margins in the years after that, as the acquisition will create some additional costs during 2018.

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