Play Magnus AS: Contemplated private placement and listing on Merkur Market

Oslo, 24 September 2020 – Play Magnus AS (the “Play Magnus Group” or the “Company”) has engaged ABG Sundal Collier and Sparebank 1 Markets (together the “Managers”) to advise on and effect a contemplated private placement of approx. NOK 400 million in new and existing shares in the Company (the “Private Placement”). The Private Placement will comprise an offer of new shares raising gross proceeds to the Company of approx. NOK 250 million (the “Primary Offering”) and a sale of existing shares of up to approx. NOK 150 million from certain existing shareholders in the Company (the “Secondary Offering”).

The Play Magnus Group has applied for, and will, subject to successful completion of the Private Placement and the necessary approvals from the Oslo Stock Exchange, list the shares of the Company on Merkur Market (the “Listing”). The first day of trading on Merkur Market is expected to be shortly after completion of the Private Placement, and is currently anticipated to be in the latter part of the week commencing 5 October 2020.

The Play Magnus Group offers services that enable users to play, watch, and learn chess, and professionals to teach, create content, and compete. The Company’s services consist of the Play Magnus App Suite, chess24, Chessable, and CoChess. In addition, in 2020 the Company launched a professional online chess tour which received significant interest and viewership worldwide.

“The Company has developed enormously from a standalone app to becoming an industry leader with an ecosystem of innovative chess services. Our ambition is to create the world’s best experiences for playing, learning and watching chess. A listing on Merkur Market in Oslo will create a solid platform for further growth,” Co-Founder and Chairman of Play Magnus Group, Anders Brandt said.

The net proceeds from the Primary Offering will primarily be used for investing in new and existing products, building on the 2020 Tour’s success with the upcoming Champions Chess Tour, potential bolt-on acquisitions and general corporate purposes.

“The Play Magnus Group has products and services that engage millions of chess enthusiasts around the world. We are in an extremely exciting phase of the company’s development, and we are proud that large institutional investors want to be part of this journey,” CEO of the Company, Andreas Thome, said.

In August 2020, the Company had more than three million registered users across its platforms and approximately 35,000 monthly paying customers worldwide.

“The market is growing, and we are in an early phase which requires further investments. We will invest heavily in technology development in the future and the Company does not rule out further acquisitions. We will build on the success of the 2020 Tour and further develop this to its full potential.” Andreas Thome said.

The price per share in the Private Placement has been set to NOK 21.00, equivalent to a pre-money equity value of the Company of NOK 796 million based on the 37,883,800 shares currently outstanding in the Company. Four cornerstone investors, have, subject to certain terms and conditions, undertaken to subscribe for and be allocated shares for a minimum of NOK 200 million as follows: (i) Luxor Capital Group has undertaken to subscribe for shares for approx. NOK 140 million (USD 15 million equivalent) and be allocated shares for a minimum of NOK 115 million; (ii) DNB Asset Management has undertaken to subscribe for and be allocated shares for NOK 30 million; (iii) Tin Fonder has undertaken to subscribe for and be allocated shares for NOK 30 million, and (iv) TD Veen AS has undertaken to subscribe for and be allocated shares for NOK 25 million. Additionally, Investinor AS (existing shareholder) has precommited to subscribe for 9% of the Primary Offering, equivalent to NOK 22.7 million.

To stimulate liquidity for the listed shares, the original founders of Play Magnus AS, chess24 and Chessable are selling a portion of their shares as part of the Private Placement. The majority of shares in the Secondary Offering will be sold by LT Holdings Ltd, the largest current shareholder in the Play Magnus Group.

The bookbuilding period in the Private Placement will commence today, 24 September 2020 at 09:00 CEST and close on 25 September 2020 at 14:00 CEST. The Managers and the Company may, however, at any time resolve to close or extend the bookbuilding period. If the bookbuilding period is shortened or extended, any other dates referred to herein may be amended accordingly.

The Private Placement will be directed towards Norwegian and international investors, in each case subject to an exemption being available from offer prospectus requirements and any other filing or registration requirements in the applicable jurisdictions and subject to other selling restrictions. The minimum application and allocation amount has been set to the NOK equivalent of EUR 100,000. The Company may, however, at its sole discretion, allocate an amount below EUR 100,000 to the extent applicable exemptions from the prospectus requirement pursuant to the Norwegian Securities Trading Act and ancillary regulations are available.

Completion of the Private Placement is conditional upon i) approval of the Private Placement by the Company’s board of directors, ii) approval from an Extraordinary General Meeting in the Company to be called for as soon as possible after the close of the bookbuilding period for the Private Placement, currently expected to be held on Friday 2 October 2020, and iii) the registration of the share capital increase in the Norwegian Business Register.

The Company reserves the right, at any time and for any reason, to cancel, and/or modify the terms of, the Private Placement. Neither the Company nor the Managers will be liable for any losses incurred by applicants if the Private Placement is cancelled, irrespective of the reason for such cancellation.

Play Magnus Group in brief

Founded in Norway by four-time World Chess Champion Magnus Carlsen, the Play Magnus Group is a global leader in the chess industry focused on providing the premier digital experiences for the millions of chess players and students around the world. The company offers eLearning and entertainment services via its market leading brands: chess24, Chessable, CoChess, Play Magnus and the Champions Chess Tour. The Group’s mission is to grow chess to make the world a smarter place.

Company highlights

  • Three million registered and approximately 35,000 monthly paying customers
  • Approximately USD 7m annual revenue run-rate, with ~120% YoY revenue growth for H1 2020, of which ~80% are subscription or course purchases
  • ~70% growth in monthly paying users over the last 12 months
  • Proven ability to accelerate growth of acquired M&A targets through ecosystem synergies and to make accretive acquisitions of content
  • 2025 target of USD 60m annual revenue run-rate

Advisors

ABG Sundal Collier ASA and SpareBank1 Markets AS are acting as Joint Bookrunners in connection with the Private Placement. ABG Sundal Collier is acting as Merkur Advisor and Sparebank 1 Markets is acting as Co-Merkur Advisor in connection with the Listing.

Simonsen Vogt Wiig is acting as legal advisor to the Play Magnus Group, while Advokatfirmaet Thommessen AS is acting as legal advisor to the Managers. Corporate Communications AS is acting as communication advisor to the Company.

Contact information:

Andreas Thome, CEO, +47 97 51 16 88

Dmitri Shneider, CFO, +852 9623 4618