Terms of the deal
Vertigo is behind the million-selling and award-winning global hit Arizona Sunshine and After the Fall is still in the pipeline. The upfront equity purchase price amounts to €50 million in total. EUR 40 million is paid in cash and EUR 10 million is paid in newly issued B shares. The amount equals an upfront enterprise value of about EUR 45 million, adjusted for EUR 5 million in acquired cash. Depending on the fulfillment of agreed earnings targets and the release of various titles within 10 years, an earn-out consideration of a maximum of EUR 65 million may be paid. A total of EUR 25million will be paid in cash and a maximum of EUR 40 million will be paid in newly issued B shares. A company’s presentation of Vertigo Games took place in connection with the Annual General Meeting on September 16, 2020. Richard Stitselaar, CEO of Vertigo Games, said: Koch Media has been monitoring the VR market in recent years. The CEO, Dr. Klemens Kundratitz, believes that it is the right time for the firm to extend its activities into the fast-growing market. He added: The two companies will combine their strong global development and publish network with their specialized VR games expertise.
The future
In the next financial year, April 2021 until March 2022, the firm expects net sales of EUR 18–24 million and Operational EBIT of EUR 11–17 million. The firm expects both revenues and profitability to gain a stable growth in the coming years. Vertigo’s financial results linked with the earnout calculation will be prepared depending on Vertigo Games’ local GAAP accounting principles. Also, the announced expectations of the net sales and Operational EBIT for January – December 2020 and April 2021 – March 2022 are subject to Embracer Group’s accounting principles (K3). The VR gaming market is expected to exhibit considerable growth in the coming years jointly driven by new high-quality headsets, tethered and standalone, and increasing releases of high-quality VR games. Embracer Group is making aggressive investment moves lately in the gaming world. A month ago it acquired a 100% stake in 4A Games Limited.
