Nazara Tech Shares Jump 3% on ₹270 Crore German Gaming Firm Acquisition

On June 28, shares of Nazara Technologies Limited rose nearly 3% after its Singaporean subsidiary, NODWIN Gaming International Pte (NODWIN), entered into an agreement to acquire an 86.49% stake in Freaks 4U Gaming through a share swap deal valued at ₹271.48 crore. At 11:23 am IST, Nazara Technology share price was trading 2.51% higher at ₹833.7 on the NSE.

NODWIN Pte plans to initially raise its current stake in Freaks 4U Gaming to 57%. The remaining 43%, held by founders Michael Haenisch, Matthias Remmert, and Jens Enders, will be swapped at a later date at NODWIN's discretion. As part of this deal, existing investors in Freaks 4U Gaming will become shareholders in NODWIN Pte. 

This acquisition is set to greatly bolster NODWIN Gaming's capabilities by integrating the expertise, experience, and network of the Freaks 4U Gaming team. It is anticipated to materially enhance NODWIN's revenues in the future. 

The total acquisition cost for 86.49% of Freaks 4U Gaming is Euro 30,360,000 (₹271.48 crore). Of this amount, EUR 23,452,144 will be paid through a share swap upon completion of the transaction, while the remaining EURO 6,907,856 will be paid later at NODWIN's discretion.

The acquisition will be conducted through a share swap method, with a total of 104,764 shares of Freaks 4U Gaming being exchanged for 171,458 Class A preference shares of NODWIN Singapore. Upon completion of the transaction, 52,683 shares of Freaks 4U Gaming, valued at EUR 23,452,144, will be swapped for 132,446 Class A preference shares of NODWIN Singapore, matching the value. 

“This acquisition is set to bolster NODWIN’s access to developed markets, in addition to execution and planning capabilities in PC gaming and games publishing support services. The integration of Freaks 4U’s capabilities, along with its presence in key developed markets, will serve as substantial revenue drivers. This strategic alignment will complement NODWIN’s strong execution capabilities in emerging markets, enabling the establishment of a global delivery model – a pioneering achievement in the esports sector,” the statement said.

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.
 
NODWIN’s consolidated net profit from continuing operations rose by 43.4% to ₹17.05 crore in Q4 FY24, compared to ₹11.89 crore in Q4 FY23. However, revenue from operations decreased by 7.99% year-on-year to ₹266.21 crore for the quarter ending March 2024. The acquisition is expected to be completed by July 15, 2024. Following this acquisition, NODWIN Singapore will hold 57% of the share capital of Freaks 4U Gaming.