By Dominic Chopping
STOCKHOLM--Shares in Modern Times Group rose more than 12% in early European trade after the Swedish gaming group announced the acquisition of video game developer Plarium Global.
MTG will buy Plarium from Australian gaming and entertainment group Aristocrat Leisure for up to $820 million, boosting its stable of games and increasing cash flow.
Plarium--best known for its flagship title Raid: Shadow Legends--generated revenue of $613 million in the 12 months to Sept. 30, with adjusted Ebitda of $137 million and $110 million in free cash flow.
MTG said the deal would nearly double its Ebitda and free cash flow, while Plarium's technology and expertise in marketing and monetization would drive commercial synergies and further improve group performance.
Kepler Cheuvreux analyst Rasmus Engberg said MTG has paid a good price for a growing business with the deal doubling the size of the Swedish company.
"We believe the stock is likely to perform strongly today, as the deal is value enhancing and strongly accretive to earnings per share and cash flow," he said.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
November 12, 2024 04:51 ET (09:51 GMT)
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