New consequences of sanctions. Swedish gaming holding EG7 has announced plans to sell the company Innova. The deal is estimated at €32 million. This is much less than the amount for which Innova was purchased in February last year.
The transaction format is MBO (management buy-out). That is, the sale of the company to its management. The chosen approach in EG7 is explained by the desire for further growth of Innova and the preservation of a strong local team.
As for the reasons for the transaction, they are obvious — the unwillingness of the Swedes to continue operating on the territory of the Russian Federation.
Recall that despite the fact that Innova is legally based in Luxembourg, its key facilities are located in Russia. Until recently, the company specialized in operating Asian MMOs in Russia.
In its last report — for October-December 2021 – EG7 reported that its net revenue from the “Russian legal entity Innova” amounted to more than $7 million, and profit (EBITDA) — $2.7 million. For understanding, this is 13% of the revenue and 22% of the profit of the entire holding for this period.
100% of Innova shares were bought by the holding a year earlier — in February 2021 — for €109 million shares. Now the redemption of the same 100% will be carried out in the format of a loan agreement.
EG7 had big plans for Innova, which owns the 4game platform. The Swedes were confident in the potential of the latter. They expected that with its scaling, Innova would have the opportunity to operate MMO not only in Russia, but also in Europe and Latin America.
As part of the press release, the Swedish company also announced the relocation of the Tver office of its Toadman Interactive to Western or Eastern Europe. The latter is known for working on Immortal: Unchained.