ADMISSION AND FIRST DAY OF DEALINGS

Published by Nektan on 03/11/2014

Nektan, an international B2B mobile gaming platform provider, is pleased to announce the admission to trading on AIM of its entire issued share capital, and the commencement of dealings, at 8 a.m. today under the ticker code “NKTN”.

Highlights:

  • The Group has raised £4.1m (before expenses) at a placing price of 236 pence per Ordinary Share;
  • The total number of Ordinary Shares in issue at Admission is 21,228,187, giving the Group a market capitalisation of approximately £50.1m at the Placing

Price:

  • The Directors view Admission as an important step in the Group’s development, and will assist in enhancing the Group’s credibility within commercial discussions while providing the Company the opportunity to access capital when commercial opportunities arise;
  • The funds raised via the Placing will be used to expand the Group’s business development and product development; provide sufficient working capital to support the operation of the Group’s end-to-end platform, ‘Evolve’; and provide headroom for further investment in product development to expand its mobile gaming suite;
  • On Admission, Directors of the Company will hold 29.2 per cent. of the Company’s ordinary Shares which will be subject to a 12 month lock-in period. A further 16.2 per cent. of the Company’s Ordinary Shares will similarly be subject to a 12 month lock-in period.
  • Panmure Gordon (UK) Limited is acting as Nominated Adviser and sole Broker to the Company.

Business overview:

  • An international, licensed operator of a wholly owned technology platform built for the delivery of mobile gaming content in regulated markets;
  • Since foundation, Nektan has been purely focused on mobile gaming, the fastest growing segment in gaming that is predicted to be worth more than €19 billion of gross gaming revenue by 2018;
  • The Group’s gaming platform, ‘Evolve’, provides a full end-to-end white label, mobile solution for any business;
  • The Group is targeting the US and Europe with a B2B product-driven growth strategy;
  • Nektan currently has a number of live white label partners including Go Win Casino, Red8Casino, Rethotgoldrush, and Winzino. In addition, the contracted pipeline includes City A.M., RTL Group, Mr. Green, and a scale US-based media owner;

On joining AIM, Gary Shaw, Executive Chairman of Nektan, commented:

“We are delighted with the investor response to the Placing which recognises Nektan’s wholly owned technology platform and B2B growth opportunities in the US and in Europe for mobile gaming. Admission to AIM is a significant milestone Nektan’s development, and will assist in enhancing the Group’s credibility within commercial discussions. The funds raised will in part be used expand Nektan’s mobile gaming suite, and the Group is now well positioned to capture significant growth opportunities in the fastest growing segment in gaming.”

Enquiries:

Nektan 
Gary Shaw, Executive Chairman
Tel: Via Hudson Sandler
+44 (0)20 7796 4133
Panmure Gordon (Nominated Adviser and Corporate Broker) 
Corporate Finance:
Andrew Godber/ Atholl Tweedie/ Duncan Monteith
Corporate Broking:
Charles Leigh-Pemberton
Tel: +44 (0)20 7886 2500

 

Hudson Sandler (Financial PR) 
Nick Lyon/ Alex Brennan
Tel: +44 (0)20 7796 4133

Defined terms used in this announcement have the same meaning as set out in the Company’s admission document dated 29 October 2014.

Panmure Gordon (UK) Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for the Company and no-one else in connection with this announcement, the Placing and Admission. Panmure Gordon (UK) Limited will not regard any other person as its client in relation to the matters described in this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to its clients, nor for providing advice in relation to the Placing and Admission, the contents of this announcement or any transaction, arrangement or other matter referred to herein.

ABOUT NEKTAN

Nektan is an international B2B mobile gaming platform provider. It is a developer and operator of mobile games in the regulated, interactive RMG and freemium gaming space, delivering white label implementations to large commercial organisations that have established online audiences. Formed in 2011, Nektan operates under a full Remote Gambling Licence issued by the Gibraltar Licensing Authority and maintains sales and customer support operations in its two primary geographical targets, Europe and North America, from offices in Gibraltar, London and Las Vegas. The Group has developed a full end-to-end platform, Evolve, which is purely focussed on supporting mobile gaming. Nektan’s white label platform simplifies the route to mobile gaming revenues for its target commercial entities: managing the full customer experience and back-office operations, allowing the partner solely to focus on marketing the product to its consumers.

KEY STRENGTHS AND OPPORTUNITIES

Mobile gaming channels to market

Nektan was formed in 2011 by Gary Shaw to exploit white label gaming opportunities globally. Nektan is a developer and operator of mobile games in the regulated, interactive real money gaming (“RMG”) space and the freemium gaming space (free of charge but where money is charged for additional functionality or features), delivering white label implementations to large commercial organisations that have established online audiences. The Company’s two live primary mobile gaming channels to market, RMG casino and freemium bingo, are intended to be at the forefront of on-demand mobile gaming entertainment, and two further channels, RMG bingo and freemium casino, are planned to commence in 2015.

Increasing demand for on-the-go entertainment and mobile gaming content

By 2017, it is estimated that there could be 3.4 billion smartphones and 905 million tablets in active use worldwide. Nektan’s market opportunity is driven by the increase in ownership of these mobile devices, as well as the increasing demand for on-the-go entertainment on those devices. In addition, the growing demand for gaming content on mobile devices gives rise to estimates of €19 billion of gross gaming revenue being generated from mobile gaming by 2018.

Innovative and scalable technology that provides a disruptive market opportunity

Nektan’s business is centred on its wholly-owned end-to-end platform, ‘Evolve’, which is purely focussed on supporting mobile gaming across all major mobile and touch devices (as opposed to desktop), ensuring its products provide the optimal mobile entertainment experience for end users. The bespoke nature of Evolve gives flexibility to meet new market demands, ensuring it has a speed-to-market advantage and the ability to produce a partner branded solution in a matter of weeks. The platform also offers scalability without introducing technical complexity across both RMG and freemium channels through a connected single network and centralised back-office environment.

US market opportunity

A dual track approach has been taken in regard to developing Nektan’s opportunities in the US. The first track is for its established joint venture, Broadcast Gaming, to deliver freemium mobile gaming platform to established agency targets that retain large online audiences. The Company plans to use celebrity endorsements to promote the freemium mobile bingo product. The second track would see the Company deliver mobile platforms to tribal casino operators to provide Class II and freemium gaming content, representing a major opportunity to access the $27 billion tribal gaming market.

Partnerships and commercial pipeline

Nektan targets large commercial organisations that have established online audiences for its white label gaming offer. The Company manages the full customer experience and all back-office operations, allowing the partner to solely focus on marketing the product to its customers as a distribution network. The Company currently has a number of live white label partners including Go Win Casino, Red8Casino, Redhotgoldrush, and Winzino. In addition, the contracted pipeline includes City A.M., RTL Group, Mr. Green and a scale US-based media owner.

Experienced Board and management team

The Group is led by an experienced management team with proven, individual track records in remote gambling, mobile gaming and delivering white label solutions, with many years’ experience and a deep knowledge of the European and US gaming sectors. The executive management team has previously managed the operations of pioneering companies within the gaming sector, including B2C, B2B, white label and content licensing businesses, and possesses the ability to assist the Company in meeting its strategic goals. Gary Shaw is an entrepreneur with a consistent track record of significant experience of building and leading high growth companies, including when St Enodoc, which Mr Shaw also founded, was acquired by GTECHLottomatica for $55 million (£32.9 million) in 2008. Additionally, there is a high level of listed public company experience at board level, including former roles at Sportingbet and London Capital Group.

Placing and use of proceeds

The Company has successfully completed a fundraising of £4.1 million via a placing occurring over two stages. At Admission, the Company has placed a total of 1,539,831 new Ordinary Shares at the Placing Price, raising approximately £3.6 million (gross) for the Company (the “Initial Tranche Placing”). In addition, Gary Shaw, CEO, has irrevocably undertaken to subscribe for 211,684 Ordinary Shares at the Placing Price by no later than 31 December 2014, raising a further £0.5 million for the Company (the “Second Tranche Placing”) (together, the “Combined Placing”). The Group will use the net proceeds of the Combined Placing to expand the Group’s sales, business development and product development; provide sufficient working capital to support the operation of the ‘Evolve’ platform and mobile gaming channels; and provide headroom for further investment in product development to expand its mobile gaming suite.

Placing statistics

Placing Price per Ordinary Share 236 pence
Number of existing Ordinary Shares 19,688,356
Number of Ordinary Shares to be issued by the Company pursuant to the Initial Tranche Placing 1,539,831
Number of Ordinary Shares issued by the Company pursuant to the Second Tranche Placing 211,864
Number of Ordinary Shares in issue at Admission 21,228,187
Gross proceeds of the Initial Tranche Placing receivable by the Company £3.6 million
Estimated net proceeds of the Initial Tranche Placing receivable by the Company £2.5 million
Gross proceeds of the Second Tranche Placing receivable by the Company £0.5 million
Estimated market capitalisation of the Company at the Placing Price at Admission £50.1 million
TIDM NKTN
ISIN GI000A12CYF8
SEDOL BRJ64Q1

Important Notice

This announcement is for information purposes only and does not constitute an admission document and does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares in the capital of the company, nor shall it (or any part of it), or the fact of its distribution, form the basis of, or be relied on in connection with or act as any inducement to enter into, any contract or commitment whatsoever.

Panmure Gordon (UK) Limited is regulated by the Financial Conduct Authority and is acting exclusively for the Company and no one else in connection with the Placing and Admission and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Placing or Admission and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing, Admission or any transaction, arrangements or other matters referred to in this announcement.

This announcement is not for publication or distribution, in whole or in part, directly or indirectly, in or into the United States, Australia, Canada, the Republic of Ireland, the Republic of South Africa, Japan or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession this announcement, or other information referred to herein, comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

The securities referred to herein may not be offered or sold, directly or indirectly, in the United States unless registered under the US Securities Act of 1933, as amended (the “US Securities Act”) or offered in a transaction exempt from, or not subject to, the registration requirements of the US Securities Act. The offer and sale of securities referred to herein has not been and will not be registered under the US Securities Act or under the applicable securities laws of Australia, Canada, the Republic of Ireland, the Republic of South Africa or Japan. There will be no public offer of the Ordinary Shares in the United States, Australia, Canada, the Republic of Ireland, the Republic of South Africa or Japan. Subject to certain exceptions, the Ordinary Shares referred to herein may not be offered or sold in Australia, Canada, the Republic of Ireland, the Republic of South Africa or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada, the Republic of Ireland, the Republic of South Africa or Japan.

No reliance may or should be placed by any person for any purpose whatsoever on the information contained in this announcement or on its completeness, accuracy or fairness. The information in this announcement is subject to change. Investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. This announcement does not constitute a recommendation concerning the Placing. The value of shares can decrease as well as increase. Potential investors should consult a professional advisor as to the suitability of the Placing for the person concerned.

Forward Looking Statements

Certain statements contained within the announcement are forward looking statements and are based on current expectations, estimates and projections about the potential returns of the Group and industry and markets in which the Group operates, the Directors’ beliefs and assumptions made by the Directors. Words such as “expects”, “anticipates”, “should”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “projects”, “pipeline” and variations of such words and similar expressions are intended to identify such forward looking statements and expectations. These statements are not guarantees of future performance or the ability to identify and consummate investments and involve certain risks, uncertainties, outcomes of negotiations and due diligence and assumptions that are difficult to predict, qualify or quantify. Therefore, actual outcomes and results may differ materially from what is expressed in such forward looking statements or expectations. Among the factors that could cause actual results to differ materially are: the general economic climate, competition, interest rate levels, loss of key personnel, the result of legal and commercial due diligence, the availability of financing on acceptable terms and changes in the legal or regulatory environment.

These forward-looking statements speak only as of the date of this announcement. The Group expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Group’s expectations with regard thereto, any new information or any change in events, conditions or circumstances on which any such statements are based, unless required to do so by law or any appropriate regulatory authority.