Animoca Brands to acquire 75% of Hong-Kong-based Skytree Digital Limited

Animoca Brands Corporation Limited (ASX: AB1), develops and commercialises a broad portfolio of mobile games and apps for smartphones and tablets using gamification, blockchain, and artificial intelligence technologies. These include Crazy Kings, Crazy Defense Heroes and Sandbox as well as products based on well-known intellectual properties such as Thomas & Friends™, Snoopy, Garfield and others. The company was established in 2014 and based in Hong Kong, Canada, Finland, and Argentina.

On April 12th, 2019, Animoca announced that its wholly-owned subsidiary, Animoca Brands Limited has initiated the acquisition of 75% of the issued capital of Skytree Digital Limited, a Hong Kong-based mobile game developer and publisher, for an upfront consideration of AUD 850,000, in shares (AUD 425,000) and cash (AUD 425,000). The acquisition is expected to be closed by June 3rd, 2019, subject to final due diligence, closing conditions, and shareholder approval.

The strategic rationale behind the move is to significantly and cost-effectively increase the development capabilities of Animoca related to its recent licencing arrangements with major international sports brands (F1®, Major League Baseball, Bundesliga, Bayern Munich). Animoca would be able to largely benefit and leverage on Skytree’s current product portfolio that offers noteworthy commercial opportunities and well suited to blockchain and NFTs.

Skytree, established in 2013 by entrepreneurs Silver Yu and Andy Chan, is a multiple award-winning game development studio with titles including Hachi Hachi and Trillionia, that have around 5 million downloads. Besides, Skytree generated ~AUD 681,000 in revenue in 2018 and the revenue for Q1 2019 increased by 27.5% (annualised basis).

Recently, Animoca Brands Corporation appointed Mr Michael Ephraim as its head of partnerships for Australia and New Zealand (ANZ). With an extensive prior experience as the MD of Sony Computer Entertainment (SCE) ANZ and VP SCE Europe for 22 years amongst others, Mr Ephraim will assist in building Animoca Brands’ profile and largely drive growth while executing connections with leading sporting organisations and game companies in the region.

On April 4th, 2019, Animoca Brands informed to have entered into a binding term sheet with the Germany-based operator of the popular fantasy sports game Football-Stars, Stryking Entertainment GmbH, to acquire 100% of its equity for EUR 1 million (~ AUD 1.58 million). The move is highly complementary to Animoca Brands and its projects, given Stryking’s highly experienced management team of serial entrepreneurs in the fields of games and finance, with hundreds of millions of dollars in successful exits.

The company recently completed a heavily oversubscribed strategic capital raise of UD $ 4.6 million at a 4.2% premium to the 30-day VWAP from international blockchain investors, Australian institutional investors, and existing shareholders.

As per the Annual Report for 2018, the revenue from operating activities reached a record $ 12.6 million, up 94% year-on-year. The Company ended the year with $ 7.66 million in cash and cash equivalents, up 1014% as compared to the prior year.

With 752.05 million outstanding shares, the AB1 stock price was trending on the market at AUD 0.135, down 3.57% on Friday, April 12th, 2019 at 03:59 PM AEST.


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