PCF Group S.A. acquired 100% of Montreal-based creative agency Game On Creative, Inc. to bolster its North American motion capture, cinematic, and audio production capabilities.
The purchase price is valued at eight times Game On’s 2020 EBITDA, subject to adjustments for debt, working capital, and leakage.
The transaction is primarily financed through a private subscription of PCF Group Series D shares issued to the seller’s trust, SG Trust.
A five-year earn-out provision grants the seller 5% of annual EBITDA contingent upon meeting specific performance targets.
Game On founder Samuel Girardin will serve as Studio Head of People Can Fly Canada while retaining his presidency at Game On.
The agreement includes a lock-up period for newly issued shares and a call option mechanism to protect the buyer if share registration is delayed beyond 2021.
PCF Group delayed the public disclosure of the March 11, 2021, letter of intent to comply with European Market Abuse Regulations and protect the integrity of the negotiation process.
This regulatory report, issued on April 27, 2021, details the acquisition of Game On Creative, Inc. by PCF Group S.A. (People Can Fly). The disclosure reveals previously delayed inside information regarding a non-binding letter of intent signed on March 11, 2021, and the subsequent execution of a definitive investment agreement. The transaction involves the 100% acquisition of the Montreal-based creative agency, which specializes in motion capture, cinematics, and audio for the global gaming industry.
The financial structure of the deal establishes a purchase price based on eight times Game On’s 2020 EBITDA, subject to adjustments for debt, working capital, and potential leakage. The acquisition is primarily financed through a private subscription of PCF Group Series D shares issued to the seller’s trust, SG Trust. To align long-term interests, the agreement includes a five-year earn-out provision granting the seller 5% of annual EBITDA if specific targets are met. Furthermore, most newly issued shares are subject to a lock-up period, and a call option mechanism is established should the share registration face delays beyond 2021.
Strategically, the acquisition integrates Game On into PCF Group’s North American operations. Samuel Girardin, the founder of Game On, transitions to the role of Studio Head at People Can Fly Canada while maintaining his presidency at Game On. PCF Group justified the initial delay in public disclosure under European Market Abuse Regulations to protect the integrity of negotiations and prevent third-party interference that could have compromised the transaction's terms or misled the public regarding the deal's certainty.
