Modern Times Group buys Plarium for $620M

Modern Times Group has agreed to buy Plarium, the maker of RPG Raid: Shadow Legends, from Aristocrat Leisure for $620 million.

MTG is acquiring 100% of Plarium Global, a Tel Aviv, Israel-based game studio with a long history of success in mid-core mobile games. MTG said the acquisition will substantially improve its already strong cash flow generation. Of the $620 million, about $20 million will be deferred for payment in 2026.

The consideration will be offset by the cash flow that will be generated from the start of Q4 2024 until closing, which is expected in the first quarter of 2025, resulting in an estimated final EV/adjusted EBITDA multiple below 4.5 times.

There will be a performance-based earnout structure of $30 million based on Raid: Shadow Legends revenues for 2025, and MTG will book that on the balance sheet. There is a second potential stretch earnout target of up to $170 million based on Plarium’s 2028 revenues, which will not be booked on the balance sheet.

Plarium mixes well with MTG and the deal results in one of the strongest mid-core mobile gaming portfolios in the industry to power future organic growth, the companies said.

Plarium generated $613 million in revenues and $137 million in adjusted EBITDA and $110 million in free cash flow for the LTM period ended 30 September 2024.

The combined group will have total annual sales in excess of $1.1 billion and adjusted EBITDA in excess of $275 million, nearly doubling MTG’s EBITDA and free cash flow and the acquisition is expected to be strongly EPS accretive. Banks are providing about $460 million of the debt for the purchase price.

Onboarding key MTG games to Plarium’s two key commercial platforms, Plarium Play and GoGame, will help accelerate the growth of these titles. MTG expects to be able to benefit from Plarium’s experience, which will strengthen its already well-developed marketing capabilities and enable it to accelerate organic growth through Plarium’s strong live-ops. 

MTG also expects to be able to contribute key technologies and expertise to Plarium in areas like browser play, the optimization of casual games and expansion of games to additional 3rd party platforms.

“I am proud and excited to welcome Plarium to MTG in this transformative deal, which elevates MTG into a leading European gaming group,” said MTG’s group president and CEO Maria Redin, in a statement. “In Plarium, we have found a great partner to evolve and accelerate together. They bring an exciting and highly successful portfolio of live games spearheaded by Raid: Shadow Legends, an exceptional evergreen mid-core IP, to our line-up. The studio also has three additional strong live games, and an exciting new games pipeline in both the mid-core and the casual segments, which creates healthy optionality for future growth.”

“Plarium also has best-in-class tools for user acquisition and monetization,” she said. “These tools will complement our own Flow Platform and boost the performance of some of our existing live titles. Plarium is led by a strong, experienced and dedicated team that fits very well into our entrepreneurial and driven culture and I look forward to welcoming them to the group.”

Plarium was founded in 2009 in Israel and was acquired by Aristocrat in 2017. The studio currently has approximately 1,300 employees and is headquartered in Israel, with teams in Poland, Ukraine, Finland and the rest of the world. The studio is led by CEO Schraga Mor together with a senior management team of 12 members.  

The studio’s most successful title is the genre-leading Raid: Shadow Legends. The game was launched in 2019 and is the highest grossing turn-based role-playing game on the Google and Apple app stores. The RPG genre has approximately 10% market share of the total in-app purchase market in North America and Europe. 

The genre has a market size of $3.7 billion in Europe and North America based on in-app purchase revenues in Q3 2024. Raid: Shadow Legends is available on a cross-platform basis and Plarium has recently started collaborating with Chinese developer NetEase to launch the game in China and in key Asian markets in the future.

The studio’s other major titles include the strategy and city-building game Vikings, PVP battler Mech Arena and the casual title Merge Gardens. Together with Raid: Shadow Legends, these four titles generate around 90% of the company’s revenues. Plarium is also working on several new games to drive future organic growth.