Nazara Tech gains after Singapore arm to acquire additional stake in Freaks 4U Gaming

Nazara Technologies added 2.19% to Rs 831.65 after the firm's Singapore based arm, NODWIN Gaming International Pte, (NODWIN) has signed definitive agreements to acquire additional 86.49% stake in Freaks 4U Gaming GmbH through share swap.

NODWIN Gaming is a material subsidiary of the company. Currently NODWIN Gaming International Pte held 13.51% stake in Freaks 4U Gaming.

Freaks 4U Gaming GmbH is a Company incorporated in Germany engaged in the Gaming & Sports Entertainment business. Freaks 4U Gaming offers a multitude of agency services and best-in-case solutions to brands and publishers and generated Rs 223 crore (Euro 26.9 million unaudited) in 2023.

NODWIN Pte will initially increase its existing stake in Freaks 4U Gaming to 57% and the remaining 43% held by the founders Michael Haenisch, Matthias Remmert and Jens Enders will be swapped at a later time at its option. Existing investors of Freaks 4U Gaming will become shareholders of NODWIN Pte.

This acquisition will significantly enhance NODWIN Gaming's capabilities, bringing in the expertise, experience and network of the Freaks 4U Gaming team and is expected to contribute materially to NODWINs revenues going forward.

The cost of acquisition was Euro 30,360,000 (Rs 271.48 crore) is the total consideration payable to purchase 86.49% of Freaks 4U Gaming, of which EUR 23,452,144 is payable on transaction completion in share swap, and the balance EURO 6,907,856 in due course at Nodwins discretion.

The transaction of acquisition will done through shares swap method total of 104,764 shares of Freaks 4U Gaming will be swapped with a total of 171,458 Class A preference shares of Nodwin Singapore. At present on completion, 52,683 shares of Freaks 4U Gaming valued at EUR 23,452,144 will be swapped with 132,446 Class A preference shares of Nodwin Singapore of equal value.

The said acquisition will be completed by 15 July 2024. Post the said acquisition, Nodwin Singapore shall hold 57% of the share capital of Freaks 4U Gaming.

Since the acquisition of a minority stake in Freaks 4U Gaming in January 2024, NODWIN has been working with the Freaks 4U Gaming management on integration of the two businesses and evaluating the synergies they present. The two teams have already worked on jointly delivering high-profile projects such as the PUBG Mobile Global Open and Esports World Cup (EWC) and have jointly explored new business vertical opportunities. Based on the outcomes of this exercise and early traction on potential synergies, NODWIN Gaming and Freaks 4U Gaming have decided to proceed with this transaction.

Co-Founder of NODWIN Gaming, Akshat Rathee, stated, "This acquisition is a pivotal step in our global growth strategy. By integrating Freaks 4U Gamings expertise and resources, we are poised to deliver unparalleled services and expand our global footprint in the gaming and esports industries. In Michael, we have a person who is highly regarded across the world for his wealth of experience and expertise in the sectors. We also welcome all existing shareholders of Freaks 4U Gaming as NODWIN Gamings shareholders."

CEO of Freaks 4U Gaming, Michael Haenisch, expressed enthusiasm about the acquisition, stating, "We are thrilled to be joining forces with NODWIN Gaming to create a robust network and synergies unprecedented in our industry. Akshat is an incredible visionary and leader, our partnership has been quite the ride so far and we know the best has yet to come. With our shared vision and ambition, we look forward to driving our global expansion while spearheading innovation and growth for gaming and esports.

Nazara Technologies is a diversified gaming & sports media platform with presence in India and across emerging & developed global markets such as Africa and North America. It has offerings across the interactive gaming, eSports, ad-tech and gamified early learning ecosystems including World Cricket

The gaming and sports media company's consolidated net profit (from continuing operations) increased 43.4% to Rs 17.05 crore in Q4 FY24 from Rs 11.89 crore reported in Q4 FY23. Revenue from operations slipped 7.99% year on year (YoY) to Rs 266.21 crore during the quarter ended March 2024.

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