M.O.B.A. Network

M.O.B.A. Network AB (publ) (the "Company") has entered into a conditional agreement to acquire all shares in the French entity Wargraphs S.A.S ("the "Target") (the "Acquisition"), a leading gaming services provider and in-game application developer for League of Legends, Teamfight Tactics and Legends of Runeterra. The consideration for the Acquisition amounts to a maximum of EUR 50.0 million, of which EUR 25.0 million is payable upfront (the "Initial Consideration") plus an additional consideration of up to a maximum of EUR 25.0 million based on the Target achieved EBITDA for 12 and 24 months.

The Company has mandated Nordea Bank Abp as sole bookrunner to arrange credit investor meetings commencing on 8 May 2023 to explore the possibility to issue floating rate EUR denominated senior secured bonds with an expected volume of EUR 25.0 million within a framework of EUR 60.0 million and maturity in May 2026 (the "Bonds"). The Bonds have been underwritten by a consortium of investors who have committed to subscribe for the issue. A capital markets transaction will follow, subject to market conditions. The net proceeds from the issuance of the Bonds will be used towards financing the Initial Consideration. In connection with the issuance of the Bonds, the Company will also refinance its outstanding term loan using existing cash on balance.

THE ACQUISITION IN BRIEF AND FINANCIAL EFFECTS

The Target is a leading gaming services provider and in-game application developer providing players with key statistics and data for popular games such as League of Legends, Teamfight Tactics and Legends of Runeterra. The Target operates as a digital publisher with revenues primarily stemming from sales of advertising inventory via its web communities and its world leading in-game application (Porofessor). Per 2021/22 (fiscal period ending 30 Nov 2022), the Target generated 12-month rolling adj. net sales and adj. EBITDA of EUR 12.3 million and EUR 8.4 million, respectively. Operating cash flow for the same period amounted to approx. EUR 6.6 million.

The remaining consideration not payable upfront will be payable in increments of maximum EUR 12.5 million in 2024 and 2025, respectively, contingent on previous year's EBITDA performance of the Target (the "Earn-Out"). The Company intends to finance up to EUR 10.0 million of the Earn-Out via share issues in kind to the seller of the Target. The purchase agreement regarding the Acquisition has been signed subject to financing of the Initial Consideration.

"The acquisition is in line with our strategy and is diversifying our portfolio. The acquisition is not only strengthening our financial position, we also believe that the great assets have opportunities to grow further. Together with the founder, who will join the M.O.B.A team, we already have plans how to develop the assets further and expand into to new games and markets. With the acquisition, M.O.B.A will add extensive competence and leading in our way of being the home of some the world's most popular and high quality gaming communities and products", says Björn Mannerqvist, CEO at M.O.B.A.

"We are happy to be able to close such a transformative acquisition and financing during times like these, the structure of the transaction with the equity component also allows us to focus on the long-term growth of Wargraphs and M.O.B.A. as a combined entity."

THE TRANSACTION IN BRIEF AND RATIONAL OF THE ACQUISTION

• The company strategy is to grow organically and through acquisitions with the focus on building and acquiring communities for large and already established games.
• The Target will diversify and add new products to M.O.B.A portfolio.
• The acquisition of Wargraphs will add approximately 800,000 daily average app users on average to M.O.B.A. which will strengthen the group and potentially enable better economy of scale in discussion with add brokers and other partners.
• The Porofessor app has almost 10 million downloads as per today and the websites have recorded +4.5bn page views since launch.
• The Porofessor app is used worldwide and has a particularly strong audience in North America and Europe.
• Per 2021/22 (fiscal period ending 30 Nov 2022), the Target generated 12-month rolling adj. net sales and adj. EBITDA of EUR 12.3 million and EUR 8.4 million, respectively. Operating cash flow for the same period amounted to approx. EUR 6.6 million.
• The Target will contain cash of approximately Euro 2.0- 2.5 million (according to management and seller estimation) as the Acquisition and earn-out period will start from 1 of December 2022.
• Pro forma for the Acquisition, M.O.B.A. is expected to display 2022 EBITDA of approx. SEK 126m with a corresponding margin profile of 29 %, primarily driven by an overall higher margin profile for application advertisements, as well as a lean overhead cost structure for the Target.

Advisors to M.O.B.A. Network: Nordea Abp (sole bookrunner), Delphi & Jeantet (legal) and KPMG (financial advisor). Advisors to Wargraphs: Adviso Partners and Fidal.