LONDON, UK: SEED Innovations Ltd introduced that the unitholders of portfolio company Fralis LLC (trading as Leap Gaming), have entered right into a conditional Sale & Purchase Agreement (‘SPA’) for the sale of the the rest of Leap to existing unitholder IMG Arena US LLC based upon an enterprise worth of €14 million.
IMG Arena is an existing investor in, and the second largest proprietor of, Leap Gaming. Following the transaction, Leap will be wholly owned by IMG.
The price will be adjusted for each working capital and repayment of debt (including the time period mortgage of €250,000 superior by SEED. Completion is topic to receipt by Leap of regulatory approvals required from various Gambling Commissions (including the UK and Malta). This regulatory review course of will take some months and the events are currently estimating it could additionally be late Q1 or early Q2 2023 earlier than the transaction can be confirmed.
SEED Innovations currently estimates that the consideration at completion will be based on an fairness worth for Leap of roughly €12.9 million. Of this SEED expects to obtain roughly €5.6 million, payable €2.8 million upon Completion and as much as €2.8 million, topic to any claims under customary warranties & indemnities, on the 12-month anniversary of Completion.
In addition, SEED will additionally obtain repayment of its €250,000 Term Loan plus accrued curiosity upon Completion.
The Company intends to make use of the proceeds received for making additional investments in accordance with its investing policy.
Ed McDermott, CEO of SEED, commented: “After a number of years of a strategic partnership between Leap and IMG that is the pure subsequent step in Leap’s development. The alternative to divest our curiosity in Leap, which is more and more anomalous with the the rest of our portfolio, for cash, is prudent given the persevering with difficult market conditions which make a profitable public market itemizing for Leap within the short to medium time period unlikely. It is not the exit we envisaged however provides liquidity and enables SEED to proceed to refocus our funding portfolio while on the identical time setting Leap up for additional success within the future.
“The divestment has come at a good time for SEED, offering it with the funds to make investments in disruptive technologies, particularly within the life sciences, biotech, well being and wellness industries (including medical cannabis) the place most of our present investments sit and the place the experience of our board lies. We are optimistic that this funding focus has the potential to improve lengthy run worth creation.”