Nazara Technologies To Buy 50% Stake In Bluetile, BestPlay For $100 Million

Gaming firm Nazara Technologies has announced plans to buy a 50% stake in both Spain-based gaming studio Bluetile and its in-house engagement platform BestPlay through its UK subsidiary. The deal is valued at $100.3 million (around ₹918 crore) for the initial acquisition.

Out of the total amount, $59.7 million will be paid at the first stage of the transaction. The remaining $40.6 million is expected to be paid within six months.

The company has also kept the option open to buy the remaining 50% stake by 2028. The valuation of this stake will be linked to earnings performance of the company and is set at 6.6 times the trailing earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the relevant period.

Deal Structure And Earn-Out Terms

A part of the deal may be settled through shares. Nazara has the flexibility to pay up to 25% of the total consideration in equity, depending on its decision at the time of execution.

The deal also has a performance-linked earn-out component of up to $98.2 million (₹898 crore). This amount will be paid only if the businesses meet the agreed revenue and profit targets from 2027 to 2029.

If those targets are achieved, the payouts will be made between 2028 and 2030.

Financial Position And Business Update

After announcing its quarterly results, the company’s management said it had around ₹700 crore in net cash, giving it room to pursue acquisitions.

The company also highlighted that user acquisition costs for its gaming platform Kiddopia have come down over the past year. This was supported by internal improvements and better marketing efficiency.

For the third quarter of the current fiscal year, Nazara reported a 24% year-on-year decline in operating revenue to ₹405.9 crore. Net profit fell 35% to ₹8.8 crore.

The drop is largely due to the deconsolidation of its esports and events arm, Nodwin Gaming, which was de-subsidiarised last year. In the same quarter last year, Nodwin had contributed ₹165.1 crore to consolidated revenue, which explains the sharp impact on the numbers.

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Investor Takeaway

For investors, this deal shows that Nazara Technologies is poised for global growth. By buying stakes in Bluetile and BestPlay, they are adding more tools to their gaming portfolio.

While the "earn-out" payments are large, they are only paid if the new companies make a lot of money first. Nazara remains the leader in the gaming segment, and this deal cements its position as a global player.

Sources:

CNBC TV18

Livemint

The Economic Times