iCandy Acquires 60% Stake in European Game Developer Flying Sheep Studios

iCandy acquires Flying Sheep Studios establish its presence in the European market gambling market. In the field of video games, the European gaming market should be worth $27.4 billion in 2021. Thanks to its web-based technology which is efficient in terms of size and speed with cleaner and clearer code, as well as lower server load, Flying Sheep Studios’ in-house technology HTML5 Developer capabilities guarantee high quality games on time. HTML5 also features rich media elements, which make it possible to play multimedia material without the need for a plugin, and is designed for cross-platform use without the need for downloads or installations.

Over the years, Flying Sheep Studios has developed a wide range of proprietary software to extend the capabilities of HTML5 beyond typical 2D technology. Flying Sheep Studios has advanced to the point where it can create games with smooth 3D graphics that rival native apps thanks to its in-house development tools.

Transaction between iCandy and Flying Sheep Studios

In accordance with the binding agreement, iCandy Group is investing a total of 2 million euro (3.01 million AUD) in exchange for a 60% stake in Flying Sheep Studiosdetailed as follows:

  • €1.2 million (A$1.81 million) cash investment in Flying Sheep Studios to subscribe 37.5% of the expanded share capital of Flying Sheep Studios, and
  • €0.8 million (A$1.21 million) consideration in exchange for 22.5% of Flying Sheep Studios of the founders of Flying Sheep Studios, to be satisfied as follows:
    • cash of EUR 400,000 (AUD 603,000) (“Cash consideration“), and
    • through the issue of 4,606,549 new fully paid-up ordinary shares (“Counterpart shares”) of iCandy Group with a value of 400,000 EUR (603,000 AUD), at an issue price of 0.131 AUD.
  • In addition, the founders of Flying Sheep Studios will collectively receive 500,000 unlisted options (“Choice”), to be granted within 15 working days from the Closing Date. Each Option will confer the right to acquire one iCandy Group share at an exercise price of AUD 0.125 and will expire on April 5, 2027.

The founders will receive the consideration shares in 12 equal tranches over a three-year period, with the first tranche being delivered 15 business days after the closing date. Due to the available investment capacity of the Company under Listing Rule 7.1, Consideration Shares and Options would be expected to be issued without shareholder approval.

The three (3) founders of Flying Sheep Studios each signed a three-year management contract as part of the acquisition agreement to continue to run Flying Sheep Studios after the acquisition. If any of the founders leave the management contract before the 3-year period, iCandy Group may recover the cash consideration depending on the number of months that this founder or these founders must still serve, as well as any shares of consideration that are not have not yet been given to this founder(s).

The transaction is expected to occur during the second quarter of 2022 (the “Closing Date”), barring unforeseen circumstances. There are no other conditions precedent to completion other than the Company carrying out due diligence on Flying Sheep Studios, and the binding agreement otherwise includes terms and conditions considered conventional for an agreement of this type.

The rationale for acquiring iCandy

Based on the following reasons, the Company views the acquisition of Flying Sheep Studios as an opportunity to increase shareholder value.

  • Clear synergies and value chain growth
  • Addition to talent base

The acquisition will enable iCandy Group’s entry into the gaming metaverse by strengthening the company’s gaming backend tools and capabilities, particularly with Flying Sheep Studios’ HTML5 technology portfolio.

The merger of Flying Sheep Studio’s seasoned team of developers and software engineers will contribute to iCandy Group’s existing talent pool of over 600 people. It will also help iCandy Group achieve its goal of being a global metaverse AAA gaming powerhouse. It is currently the largest independent game developer in Australia, New Zealand and Southeast Asia.

What do you think of the acquisition of Flying Sheep Studios by iCandy? Let us know in the comments below!

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