Join the online game readers at GamesBeat Summit Next. It will be held from November 9th to 10th. Learn more about what’s coming next.
Fortis Advisors, a representative of sellers acting on behalf of Kixeye’s shareholders, has filed a proceedings in the Delaware Court of Justice today. In it, Kixeye claims that Stillfront deliberately violated the merger agreement beyond the $ 30 million “revenue” or bonus paid if Kixeye reached a certain milestone. Proceedings provide a window to usually private negotiations between businesses.
We asked Stillfront, based in Stockholm, Sweden, for comment. In June 2019, Stillfront purchased Kixeye for $ 90 million under a $ 30 million revenue contract based on Kixeye’s 2019 forecast financial performance.
Kixeye has created a popular real-time strategy game for mobile devices and PCs. The title included games such as War Commander: Rogue Salt, Battle Pirates, War Commander, and Vega Conflict.
Fortis accused Stillfront of making some creative accounting that made Kixeye’s results look worse than they really were in a malicious attempt to avoid paying revenue.
Under the original deal, Stillfront did not acquire all of Kixeye. Kixeye planned to spin off operations related to the unreleased game Kingdom Maker, which is still under development.
Revenues are based on a non-GAAP measure of financial performance called Adjusted EBITDA (Interest, Taxes, Depreciation, and Pre-Amortization Revenues). Stillfront is said to have retroactively “re-adjusted” or deliberately manipulated pre-merger costs, making it nearly impossible for Kixeye to reach its revenue targets.
Stillfront also allegedly reduced Kixeye’s spending on games after the merger, but prior to that, games were considered stable and profitable. Prior to the acquisition, Kixeye had more than 70 million unique users.
In January 2020, Stillfront announced that it had fired the Kingdom Maker team and reduced the employment of about 20 people. However, it’s not clear why they said that as the KingdomMaker team moved to Global Worldwide and continued to play games there.
When covering the gaming industry, GamesBeat’s belief is “where passion meets business.” What does this mean? As a game studio decision maker, but also as a game fan, I want to tell you how important news is to you. Whether you’re reading articles, listening to podcasts, or watching videos, GamesBeat helps you learn about the industry and enjoy engaging with it.
How do you do it? Membership includes access to:
- Newsletters such as Dean Beat
- Great, educational and fun speaker at our event
- Networking opportunities
- Special member-only interviews, chats, and “open office” events with GamesBeat staff
- Chat with community members, GamesBeat staff, and other Discord guests
- And maybe a fun prize or two
- Introducing like-minded political parties
Kixeye Shareholders Sue Stillfront for $ 30 Million Over Earnings Disputes
https://venturebeat.com/2021/10/13/kixeye-shareholders-sue-stillfront-for-30m-over-earnout-dispute/ Kixeye Shareholders Sue Stillfront for $ 30 Million Over Earnings Disputes