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Internetq Plc : Investment in Aventurine

02/02/2012 | 09:36am US/Eastern

2 Feb 12

InternetQ is pleased to announce its investment in Aventurine, an award-winning independent digital game development company

Aventurine is active in the highly profitable online games business for eight years now and has been focusing on the online massive multiplayer niche, among the most challenging segments of the gaming market. Most importantly, the Company has developed a technologically innovative, reusable software platform, with asynchronous and real-time distribution capabilities and the capacity to interconnect millions of users in highly engaging interactive environments. Its proof of concept product, called Darkfall Online, is an award-winning online massive multiplayer game of fantasy, where thousands of players from around the globe can interact, cooperate or compete with each other. With the Darkfall's sequel launch later this year, Aventurine will have the opportunity to become a successful franchise.

The Company also develops casual games for online and mobile use and is in the process of designing a cross-platform (online, console, mobile) social game code-named AV-1.0. Furthermore, Aventurine is poised to break into Asia through a co-development agreement with one of Korea's major publishing companies, ensuring that the Company's products have a steady foothold in the rapidly growing Asian markets.

Aventurine's strategy is to develop large communities of players that share common characteristics and interests and spend significant time engaging in gaming activities. Through its extended network of billing gateways with mobile network operators, InternetQ can deliver these games to millions of mobile subscribers around the world; thus benefit from the significant m-commerce opportunities as well as the steady subscription revenue generated by this activity.

The Directors consider this investment to be in line with InternetQ's strategy, as also stated in the most recent annual report and in which the company signalled its intention to invest in developing both content and development capabilities. Furthermore, the Directors believe that the particular investment has both compelling business and financial rationale as Aventurine's engaging technology will also extend the value of InternetQ's existing core products, by providing the Group with an attractive opportunity to enhance the AKAZOO mobile platform, accelerate subscription revenue growth, as well as further expand the interactive software development capabilities for mobile marketing.

More specifically, the investment in Aventurine will:

  • Broaden InternetQ's capabilities to offer its AKAZOO subscribers more complete entertainment services and therefore improve engagement, further accelerating revenue growth;
  • Dramatically improve InternetQ's software development capabilities, a key function for the continuous development of the Group's mobile engagement platforms;
  • Allow for the immediate distribution of games (mostly casual) to mobile subscribers, the demand of which is increasing rapidly around the world;
  • Allow for significant cross-sell opportunities and delivery of mobile marketing campaigns to the gaming community; and
  • Exploit the significant m-commerce potential of games that are increasingly being delivered on mobile devices.

The investment in Aventurine amounts to € 2.6 million and will be effected by subscription to a convertible bond issue (the "Issue"). The Issue is linked to Aventurine's performance and will mature in March of 2015, while InternetQ will have the option to convert the bonds into equity at any time. Assuming the conversion takes place within seven months from the launch of Darkfall's sequel (code-named Darkfall 2.0), InternetQ will own c.40% of the Company's share capital. Following such conversion, InternetQ will also have the option to buy additional Company shares in order to control the majority of its share capital.

The investment will be funded by InternetQ's cash reserves, in line with management's commitment to invest the proceeds from the most recent secondary offering to expand the business in what the Directors believe it will be an accretive fashion. More specifically, the investment is expected to be earnings enhancing for 2012 through the receipt of a 6% bond coupon and has the potential to be earnings accretive in the years to follow assuming the successful launch of Darkfall 2.0.

The Issue proceeds will be used for:

  • The launch of Darkfall 2.0 in the US and Europe;
  • The co-development of the Asian Darkfall 2.0, which is to be a free-to-play version of the original game;
  • The development of premium gaming entertainment content for InternetQ's AKAZOO platform.

Konstantinos Korletis, Chief Executive of InternetQ plc, commented:

"This investment is at the heart of our previously announced plans to develop leading edge content for the converging space of mobile marketing with social media and entertainment services, which are all directed to enhance subscription loyalty. Expanding our product portfolio and being able to both cross and up-sell services to our subscribers will be critical for our future success. Moreover, with the successful launch of Darkfall 2.0 and the development of Aventurine's other titles, we will be able to drive more focused mobile marketing campaigns to an even more affluent pool of subscribers."

Panagiotis Dimitropoulos, Founder & President of InternetQ plc also commented:

"The investment in Aventurine is a very exciting moment for us. Combining InternetQ's leading role in mobile value added services with the innovating social entertainment experience of Aventurine, will enable us to enrich the experiences of our loyal subscriber base, further strengthen our well-established R&D capabilities, and give us a strong platform for continued expansion in the global marketplace. "

For further details

InternetQ
Konstantinos Korletis, Chief Executive Officer
Veronica Nocetti, CFO

Tel: +30 (211) 101 1101
Tel: +30 (693) 260 0128
Tel: +30 (694) 420 5275

Buchanan
Jeremy Garcia / Gabriella Clinkard
Tel: +44 (0)20 7466 5000

Grant Thornton Corporate Finance
Philip Secrett / David Hignell
Tel: +44 (0)20 7383 5100

RBC Capital Markets
Stephen Foss / Pierre Schreuder / Daniel Conti
Tel: +44 (0)20 7653 4000

About InternetQ plc:

InternetQ is a trusted global leader in mobile marketing and digital entertainment solutions. Through its proprietary technology platforms, InternetQ enables mobile network operators, brands, and media companies to conduct targeted, interactive and measurable mobile communications and pushes the frontiers in digital mobile entertainment.

InternetQ is a publicly traded company listed on the London Stock Exchange's AIM, under the symbol INTQ.

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