MTG has acquired 35% of the German free-to-play developer InnoGames for around €91 million, based on a 100% valuation of €260 million.
MTG will complete the initial 35% acquisition from Eight Roads Ventures and InnoGames' founders in Q1 2017. The Swedish online entertainment company will have the option to purchase a further 16% of InnoGames at the same valuation until September next year. Should it choose to do so, MTG will then be the majority owner with an overall investment of approximately €132 million.
InnoGames, which was founded in Hamburg in 2007, has managed a successful transition from browser to mobile, even as other German free-to-play studios have faltered and stumbled. It now has four studios in Germany, which develop and maintain free-to-play strategy games and RPGs for 150 million registered users.
In an official statement announcing the deal, InnoGames CEO Hendrik Klindworth said that the company is now focused on "mobile first titles," where more than 50% of new player registrations are taking place. This year, InnoGames expects to earn €125 million, with an EBITDA margin of around 20%.
"We have been involved in the gaming space for a while now, and look for companies with clear track records in IP development that have translated into high revenue growth and a healthy profitability profile over time," said Jřrgen Madsen Lindemann, CEO of MTG. "This we have found with InnoGames. We are focused on digital verticals with global potential, and gaming is a truly global industry."
MTG, or Modern Times Group, is an entertainment company with business interests in TV, radio and digital content production. As the owner of ESL and DreamHack, it is also a major player in the European eSports scene.