The purchase price, payable at completion of the transaction, amounts to a payment of EUR 9.5 million, of which EUR 4.0 million will be paid with newly issued shares in Catena Media plc, and the remaining EUR 5.5 million in cash. The acquired assets are expected to generate quarterly sales of approximately EUR 600,000, with an operating margin of approximately 80 percent.
“The assets of Dreamworx will strengthen our position as the leading affiliate in Germany. This will place us in the top position, short-term for the World Cup 2018 as well as long-term,” states Henrik Persson Ekdahl, Acting CEO of Catena Media.
The Dreamworx assets will form part of Catena Media´s sports division and be run by the Baybets team, based in Malta. As a consideration, Baybets may add the increased performance of the Dreamworx assets to their existing earn-out calculations, and the maximum earn-out payments to Baybets, as announced by Catena Media plc on December 4, 2017, have therefore been amended as follows:
The maximum amount of the first earn-out payment has been increased from EUR 20.0 million to EUR 23.0 million.
The maximum amount of the second earn-out payment has been increased from EUR 43.50 million to EUR 50.50 million.
Up to 40 percent of the earn-out payment related to the Dreamworx assets can be paid in Catena Media shares.
As a result, the expected total earn-out payment for Baybets, in a reasonable scenario, increases from the total amount of EUR 30.5 million to EUR 39 million. In this scenario, the acquired assets of Baybets and Dreamworx needs to generate revenue growth of above 40 percent per year during the earn-out period.
Completion of the transaction is planned for the end of January 2018, subject to certain closing conditions being fulfilled, such as the acquired assets being duly transferred to Catena Media plc.
The shares will be issued at a subscription price of SEK 102,70 per share, corresponding to the volume-weighted average price for Catena Media’s shares on Nasdaq Stockholm during a period of 30 trading days up to and including January 16, 2018. This means that a total of 385,924 shares will be issued, corresponding to approximately 0.7 percent of the shares and votes in the company. The shares will be subject to a lock-up period of 12 months as from the closing date of the transaction.