Acquisition of Candywriter

Stillfront Group AB outlines the strategic acquisition of Candywriter, LLC, a Miami-based mobile game developer, in a presentation dated April 23, 2020. The primary purpose of this document is to detail the transaction structure, financial rationale, and the integration of Candywriter into Stillfront’s existing portfolio of mobile gaming studios. The acquisition aims to diversify Stillfront’s offerings by incorporating Candywriter’s expertise in casual and "mash-up" mobile games, specifically leveraging the success of the title BitLife.

The transaction is valued at an initial consideration of USD 74.4 million, consisting of USD 36.9 million in cash and USD 37.5 million in newly issued Stillfront shares. The deal includes an earn-out provision of up to USD 120.6 million based on EBIT performance through 2022, capping the total consideration at USD 195 million. As of 2019, Candywriter reported USD 26 million in net revenue and USD 15 million in EBIT. The company maintains a lean operational structure with 13 full-time employees and has achieved 42 million cumulative downloads, with BitLife contributing approximately 85% of 2019 bookings.

The strategic rationale focuses on scaling Stillfront’s presence in the casual gaming segment and utilizing its "Centre of Excellence" to enhance Candywriter’s marketing, analytics, and live-ops capabilities. The acquisition is expected to increase Stillfront’s pro forma net revenues by approximately 8% and adjusted EBIT by 11% for the 2019 fiscal year. The deal is fully financed through existing cash and revolving credit facilities, resulting in an indicative pro forma adjusted leverage ratio of approximately 1.2x. The financial data provided is preliminary, unaudited, and based on IFRS standards, reflecting a hypothetical consolidation as of January 1, 2020.