Tue, 24 Aug 2021 | BUSINESS SALE
eSports firm Gfinity has agreed a deal to acquire Megit Ltd, the company behind technology and gaming stock tracker Stock Informer, for an initial £5 million. The acquisition is around a 2.1x multiple of Megit’s £2.3 million revenue for the year ending March 2021.
Stock Informer specialises in tracking the availability of hard to acquire technology and gaming stock. Over the past year, its e-commerce referral income has generated strong revenues, driven by factors including a global shortage of computer chips, new games consoles such as the PS5 and the rapidly accelerating shift to e-commerce.
Gfinity forecasts that the Stock Informer business can be significantly expanded. Gfinity’s directors forecast that, with an anticipated reduction in demand for consoles, Stock Informer will add £1.2 million in revenues in the first year following the acquisition, rising to around £1.5 million the next year.
Gfinity Chief Executive John Clarke commented: "Gfinity's strategic focus is based on strengthening and growing 'what we own', in particular the Gfinity Digital Media group. The proposed acquisition of Stock Informer delivers this.”
“It is a highly profitable e-commerce referral site for gamers and their lifestyles. Stock Informer will be embedded into the GDM division once the transaction completes. It is a transformational acquisition for the company and highlights the ambition of the directors to continue to drive profitable growth within the group.”
The £5 million acquisition is structured with an earn-out in which the final price may increase by a maximum of £1 million depending on Stock Informer’s performance. The initial consideration is divided equally between £2.5 million in shares and cash.
Gfinity is planning to raise at least £3 million in funding to finance the cash element of the acquisition. £500,000 of the fundraising will go towards growing Gfinity’s US business and social operations.
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