First Berlin Equity Research has published a research update on Media and Games Invest SE (ISIN: MT0000580101). Analyst Ellis Acklin reiterated his BUY rating and increased the price target from EUR 7.90 to EUR 8.20.

MGI has signed a deal to take over AxesInMotion for €55m plus up to €110m in earn-outs depending on EBITDA performance hurdles. The Spain-based video game developer projects 2022 revenues of €9.2m and adjusted EBITDA of €6.0m (65% margin) with strong growth prospects going forward. The acquisition was financed with a €29m capital increase plus existing cash to keep leverage ratios at comfortable levels. MGI’s business momentum remains good as evidenced by solid Q1 prelims and now the potential synergies from the AxesInMotion deal. Our target price increases to €8.2 (old: €7.9) and factors in updated forecasts as well as a higher WACC estimate to account for rising 10 year Bund yields. To underscore the value of the deal, we note that our price target would have increased to €8.6 on a like-for-like WACC basis. We remain Buy-rated on MGI.