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Stillfront Group acquires Everguild and expands into the CCG genre


Stillfront Group AB (publ), a leading free-to-play powerhouse of gaming studios, hereby announces that it today has acquired 100% of the shares in Everguild Limited ("Everguild"), a rapidly growing independent game studio focusing on the digital Collectible Card Games (CCG) genre, for an upfront consideration of approx. GBP 1.06 million on a cash and debt free basis, of which GBP 0.54 million is payable in 5,971 newly issued shares in Stillfront and the remaining amount is payable in cash. The sellers are the joint founders and main owners of Everguild, Andres Tallos and Isabel Tallos (the "Founders"), and certain investors and key employees. The upfront cash consideration has today been paid to the sellers and the upfront share consideration has today been issued to the Founders.

Everguild was co-founded in 2014 by Andres Tallos and Isabel Tallos and employs six employees at its office in Madrid, Spain. Everguild has so far released two cross-platform games within the CCG genre; Drakenlords and The Horus Heresy: Legions. Its first title, Drakenlords, was a cross-platform CCG with deep gameplay and accessible mechanics. It received platform featuring in Google Play and the App Store when launched in November 2016. Its second title, The Horus Heresy: Legions, is a card-battler based on Games Workshop’s Warhammer 40,000 universe. It follows the story and characters of The Horus Heresy, with its massive background of novels (including numerous New York Times best-sellers), miniatures and board games. The game was launched on Apple’s App Store and Google Play in July 2018 and has attracted a stable and long-term userbase.

Everguild has a preliminary unaudited IFRS converted net revenue and adjusted EBIT for the period LTM 31 August 2020 of approx. GBP 1.18 million and approx. GBP 0.21 million, respectively.

“With the acquisition of Everguild, Stillfront enters the fast-growing CCG genre, further broadening our gaming audience and adding additional titles to our portfolio of role playing games. Everguild is a small and agile studio active within an exciting and popular niche. Everguild’s successful game The Horus Heresy: Legions has substantial growth potential going forward, and the studio has a promising pipeline of new games”, says Jörgen Larsson, CEO, Stillfront.

“Joining Stillfront represents an amazing opportunity for Everguild to continue scaling up, bringing our love for deep CCGs to a larger audience. Stillfront’s focus on long lifecycle games fits perfectly with our commitment to nurture and grow the passionate communities of players that enjoy our games. We are thrilled to become part of such an impressive family of successful studios, and look forward to the exciting opportunities ahead”, say Andres Tallos and Isabel Tallos, co-founders of Everguild.

Of the upfront consideration, approx. GBP 0.54 million was paid by way of set-off against transfer of 5,971 newly issued shares in Stillfront to the Founders. The new share issue was resolved based on the mandate to the board of directors of Stillfront granted at the annual general meeting held on 14 May 2020. Through the new share issue, Stillfront’s share capital will increase by SEK 4,179.70. The reason for the deviation from the shareholders’ pre-emption rights was to allow Stillfront to fulfill its commitments made in connection with the acquisition of Everguild. The number of newly issued shares has been calculated by using the volume weighted average price per share in Stillfront traded on Nasdaq First North Premier Growth Market during the five trading days preceding the date hereof (excluding the date hereof) converted into GBP at the average exchange rate between SEK and GBP of the Swedish Central Bank (Sw. Riksbanken) published at during the same period, i.e. the subscription price per share related to the upfront consideration amounts to SEK 1039.27. This corresponds to a dilution of 0.0172% on a fully diluted basis (i.e. based on the total number of shares and votes registered in Stillfront after the share issue in connection with the payment of the upfront consideration). The newly issued shares were subscribed and paid for on the date hereof. Payment was made by way of set-off. The newly issued shares shall be entitled to dividend as from the first record day for dividend after such shares have been registered with the Swedish Companies Registration Office and in the share register kept by Euroclear Sweden AB.

Further, an earn-out consideration may be payable by Stillfront to the sellers in an aggregate maximum amount of GBP 9.94 million on a cash and debt free basis. Any portion of the earn-out consideration payable to the Founders shall be satisfied with approx. 50% payable in cash and approx. 50% in newly issued shares in Stillfront and in relation to the other sellers, in cash only. The ultimate size of the yearly earn-out component will depend on the EBIT development of Everguild for the financial years 2021, 2022, 2023 and 2024. The total purchase price payable by Stillfront for the transaction cannot exceed GBP 11 million on a cash and debt free basis.

The subscription price for newly issued shares related to the earn-out consideration will be based upon the volume weighted average price of the shares in Stillfront traded on Nasdaq Firth North Premier Growth Market for a period of five trading days prior to and five trading days following Stillfront’s announcement of financial results for the financial years 2021, 2022, 2023 and 2024 (as applicable), converted into GBP at the average exchange rate between SEK and GBP of the Swedish Central Bank (Sw. Riksbanken) published at during the same period as set forth above.

Everguild will be consolidated into Stillfront's consolidated financial reporting from 1 November 2020.

The release, announcement or distribution of this press release may, in certain jurisdictions, be subject to restrictions. The recipients of this press release in such jurisdictions, in which this press release has been released, announced or distributed, should inform themselves of and follow such restrictions. The recipient of this press release is responsible for using this press release, and the information contained herein, in accordance with applicable rules in each jurisdiction. This press release does not constitute an offer, or a solicitation of any offer, to buy or subscribe for any securities in Stillfront in any jurisdiction, neither from Stillfront nor from someone else.

This press release does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the new shares. Any investment decision in connection with the share issue must be made on the basis of all publicly available information relating to Stillfront and Stillfront’s shares. Such information has not been independently verified by Stillfront. The information contained in this press release is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this press release or its accuracy or completeness.

This press release does not constitute a recommendation concerning any investor’s option with respect to the share issue. Each investor or prospective investor should conduct his, her or its own investigation, analysis and evaluation of the business and data described in this press release and publicly available information. The price and value of securities can go down as well as up. Past performance is not a guide to future performance.

This press release does not constitute or form part of an offer or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein may not be sold in the United States absent registration or an exemption from registration under the US Securities Act of 1933 (the "Securities Act"), as amended, and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a Transaction not subject to, the registration requirements of the Securities Act. There is no intention to register any securities referred to herein in the United States or to make a public offering of the securities in the United States. The information in this press release may not be announced, published, copied, reproduced or distributed, directly or indirectly, in whole or in part, within or into, Australia, Canada, Japan, Hong Kong, New Zealand, Singapore, South Africa, Switzerland, the United States or in any other jurisdiction where such announcement, publication or distribution of the information would not comply with applicable laws and regulations or where such actions are subject to legal restrictions or would require additional registration or other measures than what is required under Swedish law. Actions taken in violation of this instruction may constitute a crime against applicable securities laws and regulations.

This announcement is not a prospectus for the purposes of Regulation (EU) 2017/1129 (the "Prospectus Regulation") and has not been approved by any regulatory authority in any jurisdiction. Stillfront has not authorized any offer to the public of shares or rights in any member state of the EEA and no prospectus has been or will be prepared in connection with the Share Issue. In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Regulation.

In the United Kingdom, this press release and any other materials in relation to the securities described herein is only being distributed to, and is only directed at, and any investment or investment activity to which this document relates is available only to, and will be engaged in only with, “qualified investors” who are (i) persons having professional experience in matters relating to investments who fall within the definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). In the United Kingdom, any investment or investment activity to which this communication relates is available only to, and will be engaged in only with, relevant persons. Persons who are not relevant persons should not take any action on the basis of this press release and should not act or rely on it.

Information to distributors
Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended (“MiFID II”); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the “MiFID II Product Governance Requirements”), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the shares in Stillfront have been subject to a product approval process, which has determined that such shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the “Target Market Assessment”). Notwithstanding the Target Market Assessment, distributors should note that: the price of the shares in Stillfront may decline and investors could lose all or part of their investment; the shares in Stillfront offer no guaranteed income and no capital protection; and an investment in the shares in Stillfront is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the share issue to the Founders of Everguild.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the shares in Stillfront.

Each distributor is responsible for undertaking its own target market assessment in respect of the shares in Stillfront and determining appropriate distribution channels.

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Stillfront develops digital games for a diverse global audience and our broad games portfolio is enjoyed by around 50 million people every month.


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