© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
12 November 2012
TMT INVESTMENTS PLC
("TMT" or the "Company")
Investment in AppsIndep, Ltd.
TMT Investments PLC, which invests in high-growth, internet-based companies across a variety of sectors with the potential to become multinational businesses, is pleased to announce the completion of an investment in Appsindep, Ltd. ("AppsIndep"), a developer and publisher of online games.
TMT has acquired 146 newly issued and 267 existing class-B ordinary shares representing 19.24% of AppsIndep's fully diluted equity capital, for an aggregate consideration of approximately US$1,858,685.
The agreements between the parties include pre-emption rights, information rights and other rights and protections in favour of TMT.
AppsIndep's aim is to become a leading online game developer and publisher, initially in Russia, and then internationally. The company primarily develops Massively Multiplayer Online ("MMO") games based on its proprietary game engine and development platforms. A game engine is a system designed for the creation and development of video and online games. Strong technology, creative game design capabilities, and extensive knowledge of the online gaming market enable AppsIndep to regularly introduce new popular games by continuously adapting to changing customer preferences and market trends. AppsIndep's current game portfolio includes Affected Zone and Medieval Online, with a number of other online games under development. In addition, the company publishes games created by external developers.
The active online gaming audience in Russia in 2010 reached 17.9 million people. Compared to 2009, the number of Russian online gamers grew by over 25%, mainly thanks to the rapid spread of online social games. Although smaller than social games in terms of audience, the Russian MMO gaming segment accounted for over 78% of the total Russian online gaming revenue in 2009. The MMO segment in Russia is expected to remain the largest online gaming segment in terms of revenue and reach US$748.8m by 2015 (according to J'son and Partners).
AppsIndep was incorporated in Cyprus in March 2011 by a team of experienced professionals who previously launched and operated a number of successful online gaming projects. Current CEO Nikolay Sitnikov previously held executive positions in a number of online gaming companies, where he was responsible for developing and launching a number of successful game titles, including Total Influence and One World.
Alexander Selegenev, Executive Director of TMT Investments PLC, commented: "TMT's investment in AppsIndep is a further step in gaining exposure to the online gaming market, having already invested in Berryman Capital Group, an online games developer for social networks. This market is highly competitive, which places even greater importance on the quality of the team, product, and marketing execution. We believe that our investment will help AppsIndep to expand more quickly into the fast growing mobile segment (on both iOS and Android platforms) and launch a number of new high quality products in Russia and internationally."
Definitive agreements for the transaction were entered into, and the transaction was completed, on 9 November 2012. In respect of the year ended 31 December 2011, AppsIndep's unaudited net loss amounted to US$4,625, and unaudited net liabilities as at that date amounted to US$1,789.
For further information contact:
TMT Investments Plc
Mr. Alexander Selegenev
+44 1534 281 843
ZAI Corporate Finance Ltd.
NOMAD and Broker
Marc Cramsie/Irina Lomova
+44 20 7060 2220
Tel. +44 20 7638 3435
About TMT Investments
TMT Investments PLC invests in high-growth, internet-based companies across a variety of sectors with the potential to become multinational businesses. Founded in 2010 and with capital firepower of USD26m, TMT has invested in 22 companies to date. The company's objective is to generate an attractive rate of return for shareholders, predominantly through capital appreciation. The company is traded on the AIM market of the London Stock Exchange. www.tmtinvestments.com
The Investment Policy & Strategy
The Company's objective is to generate an attractive rate of return for Shareholders, predominantly through capital appreciation, by taking advantage of opportunities to invest in the TMT Sector. The Company aims to provide equity and equity-related investment capital, such as convertible loans, to private companies which are seeking capital for growth and development, consolidation or acquisition, or as a pre-IPO financing.
In addition, the Company intends to invest in publicly traded equities which have securities listed on a stock exchange or over-the-counter market. These investments may be in combination with additional debt or equity-related financing, and in appropriate circumstances in collaboration with other value added financial and/or strategic investors.
The Company is not geographically restricted in terms of where it will consider making investments. It will consider any geographical area, to the extent that the investment fits within the Company's investment criteria. The Directors and Consultants have expertise in emerging markets and, in particular, in Russia and the Commonwealth of Independent States. The Company will not be subject to any borrowing or leveraging limits.
The Company will target small and mid-sized companies and will seek to secure at least blocking stakes and board representation, where it considers that the Company and/or an investee company would benefit from such an appointment. The Company will consider making equity investments in lower than blocking stakes only where it sees ways to increase the stakes to blocking or controlling stakes at a later date. Each investment is expected to be at least US$250,000.
The investments targeted by the Company will aim to support rapidly-growing private companies to increase market share and achieve long-term shareholder value. It is envisaged that if the Company invested in a private company prior to that company listing on a stock market, the Company would retain a part of its investment in the listed entity going forward. The Company intends to work closely with the management of each investee company to create value by focusing on driving growth through revenue creation, margin enhancement and extracting cost efficiencies, as well as implementing appropriate capital structures to enhance returns.
When investing in public equities, the Company will seek to select companies with a dominant market share or strong growth potential in their respective segments. No restrictions will be placed on the size of public companies in which the Company may make an investment. The Directors intend to make investments in companies or businesses with attractive valuation, growth potential, with competent and motivated management, which enjoy brand recognition, have scalable business models, have strong relationships with customers and have in place transparent accounting policies.
Realisation of Returns
The Directors will, when appropriate, consider how best to realise value for Shareholders whether through a trade sale, flotation or secondary refinancing of the investee companies. The proposed exit route will form a key consideration of the initial investment analysis.
The Company expects to derive returns on investments principally through long-term capital gains and/or the payment of dividends by investees. The primary ways in which the Company expects to realise these returns include: (a) the sale or merger of a company; (b) the sale of securities of a company by means of public or private offerings; and (c) the disposal of public equity investments through the stock exchanges on which they are listed.
For private investee companies the Company believes that its typical investment holding period should provide sufficient time for investee companies to adequately benefit from the capital and operational improvements resulting from the Company's investment. The targeted holding period shall be reviewed on a regular basis by the Company, but it is expected that this will typically be between two to four years. For public equities the Company's objective is to maximise capital appreciation. Following the acquisition, the Company will continue to conduct extensive research and monitoring of the investment. Importance will be placed on the timing of any disposal which will follow a thorough review of market conditions and those reports and sources that are available to investors. Should the Company consider that the capital appreciation of a particular public equity investment has reached its peak or is likely to or has begun to decline, then the Company will consider the sale of that investment.