PCF GROUP S.A. publishes the issue prospectus and commences the public offer
Warsaw, 25 November 2020 — PCF Group S.A. (PCF Group, the Company, PCF, People Can Fly) a globally recognized developer of AAA games published today an issue prospectus prepared in relation to a public offering of shares in the Company and applying for admission and introduction of the Company shares to trading on the Warsaw Stock Exchange (the Offer).
- The public offer of PCF Group S.A. will cover in aggregate no more than 4,125,024 ordinary shares with a par value of PLN 0.02 each (the Offer Shares) including up to 2,062,512 new Series B shares of the Company (the New Shares) and up to 2,062,512 of existing Series A shares being sold by the current shareholders of the Company (Offerors) (the Sale Shares).
- The Sale Shares are offered by all of the twenty-five current shareholders of the Company (the Offerors).
- The Company shares that are not subject to the Offer will be locked-up until the fourth anniversary of the first day of listing of the Company shares on the WSE main market.
- The Company intends to obtain net proceeds from the issuance of the New Shares under the Offer in the range of PLN 85 – 95 million.
- The New Shares will be offered to Retail Investors, Employee Tranche Investors and the Institutional Investors. The Sale Shares will only be offered to the Institutional Investors. The Company and the Offerors intend to offer to Retail Investors approximately 15% of the Offer Shares and to the Employee Tranche Investors approximately 3% of the Offer Shares.
- The rights to shares and the New Shares to be acquired by the Employee Tranche Investors under the Offering will be subject to lock-up restrictions until the first anniversary of the first day of the New Shares being listed on the Warsaw WSE regulated market.
- Subscriptions for the Offer Shares in the Retail Investors Tranche and Employee Tranche will be accepted from 26 November to 3 December 2020. The Institutional Investors will be invited to place subscriptions for the Offer Shares from 7 to 9 December.
- The price for subscriptions from Retail Investors is PLN 46 per share (the Maximum Price). The price for subscriptions from Employee Tranche Investors is PLN 41.40 per share (the Maximum Price for Employee Tranche).
- If all New Shares are issued and subscribed for by the Investors and the Offerors sell all Sale Shares, after the completion of the Offer the Offer Shares will represent 13.95% of the share capital of the Company and carry 13.95% of the total number of votes at the General Meeting of the Company, of which the share attributable to the Sale Shares, similarly to the share attributable to the New Shares, will be 6.975% of the share capital and the total number of votes at the General Meeting.
- The Offer Shares are subject to the public Offer only in the territory of Poland. The Global Coordinator and bookrunner is Trigon Dom Maklerski S.A. The Prospectus was approved by the Polish Financial Supervision Authority on 25 November 2020 and published on the Company’s website (peoplecanfly.com) and additionally, for information purposes only, on the website of Trigon Dom Maklerski S.A. (www.trigon.pl).).
“People Can Fly is a gaming industry company – a participant of the most dynamically growing segments of new economy worldwide, with a well-deserved recognition among the global AAA game developers. Our strategy is to continue strengthening the People Can Fly brand as one of the leading independent developers of shooters and RPG-shooters in the AAA video games segment. I can now reveal that we work on two new AAA games, both in cooperation, in the same way as Outriders, with international publishers Square Enix and Take-Two Interactive. The games are being developed under the working titles Gemini and Dagger and are planned to be released by the end of 2024. We are now on the eve of release of the greatest production in our history: Outriders is planned to be released on 2 February 2021” says Sebastian Wojciechowski, president of the Management Board and majority shareholder of PCF Group S.A. “We have just announced our initial public offering as we want to join the gaming industry companies listed on the Warsaw Stock Exchange. We are embarking on this effort as we believe that investors will appreciate the potential standing before People Can Fly and the whole gaming industry. We intend to obtain an amount in the range of PLN 85 to 95 million that we will use to boost the implementation of our strategy. One of the strategic goals for the Company is to expand the existing development team in all locations, solicit new development teams, launch new development studios, or acquire other game developers. After some necessary preparations we are also planning to develop games developed by People Can Fly in the “self-publishing” model, as their developer and publisher, based on its proprietary existing or new IP.” adds Sebastian Wojciechowski.
1) AAA games are high-budget games of high quality, designed for personal computers (PCs) as well as Play Station and Xbox consoles, available in global digital distribution — among others on Steam, PlayStation Store and Microsoft Store distribution platforms, but also in box versions.
Objectives of the Issue
Objectives of the Issue
The Management Board of PCF Group S.A. intends to use all proceeds from the issue of the New Shares in the Offer to pursue the following strategic goals:
|Further expansion of the Group’s development teams in all locations
||12-18 months||PLN 15-20 mln|
|Fund works on the development of new video games and solicit new development teams or teams or start new development studios for the Group, or acquire other video game developers
Continue the development of own, unique software and tools used in game development, known as the PCF Framework
|18-24 months||PLN 30-32 mln|
|18-24 months||PLN 5-6 mln|
|Develop a concept for utilizing the existing IP of the Group or create new IP, including the following elements:
||24-36 months||PLN 35-37 mln|
People Can Fly
– global gaming business
The PCF Group is a rapidly developing video games developer specializing in shooters and cooperating with the leading international game publishers. The PCF Group runs the People Can Fly development studio that was established in 2002 and is one of the three most experienced Polish developers of AAA games. Games developed by People Can Fly include award-winning titles acclaimed worldwide by gamers and media, such as Painkiller, Bulletstorm and Gears of War: Judgment.
Currently, People Can Fly cooperates with Square Enix on the largest production in the studio’s history in terms of the budget and complexity — an RPG shooter Outriders that is scheduled to be released on 2 February 2021. People Can Fly’s technology backbone is based on Unreal Engine — a popular game development engine created by Epic Games.
Key competitive advantages:
- Seasoned developer of AAA games People Can Fly is a highly recognized brand of Triple-A games in the globally popular segment of shooters. It has own, unique expertise in creating games, evidenced by the success of such franchises as Painkiller or Bulletstorm (own IP), co-production of the Gears of War franchise or the popularity records-breaking Fortnite.
Years of cooperation with Epic Games, the global leader in the development of AAA games and the producer of the Unreal Engine, as well as with other leading publishers of AAA games in the interactive entertainment segment, equipped the Company with business, organizational and development know-how and the necessary expertise in creating AAA games, both in terms of the management of the video games development process in this segment, and in terms of cooperation with such publishers. Building on its experience gained from the participation in the development of the Unreal Engine, the Company is developing the PCF Framework – its proprietary expansion of the Unreal Engine increasing its functionality.
- International development team. One of the most important assets of People Can Fly is an international team of approximately 260 employees and associates, including about 200 professionals directly developing games in four studios (Warsaw, New York, Newcastle, Rzeszów) and two start-up studios (Montreal and Łódź). Such a structure gives People Can Fly better access to top game development and industry professionals worldwide, and the ability to develop at least two AAA games simultaneously.
- Unique business model. In the last three years the business model of PCF relied mainly on the development of own AAA games in long-term cooperation with publishers. In this model, the Company receives milestone fees during the game development process, and an agreed proportion of royalties depending on the sales profits, after the publisher’s costs are covered. Although PCF cooperates with the publisher, it still independently manages the development process, retains its creative and artistic freedom to the maximum extent and follows its own artistic vision. From the financial standpoint, the model of cooperation with the publisher lets PCF safeguard its financial liquidity thanks to regular cash flows, and realize its margin already in the development phase.
The Company is also planning to commence self-publishing of AAA games, also as a publisher of the games developed by PCF with use of the existing or new IP.
Group Financial Results
The PCF Group achieved a 38% average annual increase of sales revenue in the years 2017-2019. In 2019 the revenue reached almost PLN 84 million, as compared to PLN 70 million of revenue in 2018 and PLN 44 million in 2017.
In the first six months of 2020 the Group earned almost PLN 53 million, that is almost 97% more than in the first six months of 2019. The growing revenues were accompanied by high profitability of the Group’s business. EBITDA after the first six months of 2020 amounted to PLN 21 million (40.3% of EBITDA margin), and the net profit reached more than PLN 17 million.
People Can Fly stand outs on the backdrop of other gaming industry companies with its different business risk profile. The Company cooperates with the world’s largest game publishers who fund the development costs and are responsible for the marketing and sales of the games. As the developer, PCF receives milestone fees. This gives the Company a stable financial position and mitigates business risk as the Company earns money all through the game development process, with an agreed earnout from the sales profits.
“The PCF Group’s performance is a proof of its ability to generate considerable cash flows and to continue the development. In the years 2017-2019 the compound annual growth rate of income was 38%. The effectiveness of our business model is also reflected by the results of the first six months of 2020, when we earned almost PLN 53 million, that is almost 97% more than in the first six months of 2019, and more than PLN 17 million of the net profits” says Michał Sokal, CFO of the PCF Group S.A.
Outriders is a highly ambitious RPG shooter set in a dark science-fiction reality. The publisher of Outriders is Square Enix, a publisher whose portfolio includes such universally recognized franchises as Final Fantasy, Life is Strange, Tomb Raider, Just Cause, and Marvel’s Avengers.
In March 2020, Game Informer, the largest gaming magazine worldwide, honored Outriders with a cover and a multi-column editorial. This means that three consecutive titles of the People Can Fly team: Bulletstorm, Gears of War: Judgment and Outriders, were published on the title page of this prestigious US magazine. People Can Fly is the only developer in Poland to ever achieve such distinction.
Outriders is to be available for the new generation consoles: Xbox Series X, Xbox Series S and PlayStation 5, as well as for PCs and Xbox One, PlayStation 4, Xbox One X and PlayStation 4 Pro consoles. Already in 2021 Outriders will also be distributed through Stadia, a game delivery platform operated by Google.
AAA games market
According to Superdata (Nielsen), games in the premium segments (AAA games) for PCs and consoles constituted about 17.4% (USD 19 billion total) of the entire video game market value in 2019 (USD 109.4 billion total). Superdata predicts that in 2020 the AAA games segment will be worth nearly USD 20 billion.
Offer time schedule
|26 November – 3 December 2020||accepting subscriptions from Retail Investors and Employee Tranche Investors|
|27 November – 4 December 2020||book building process among the Institutional Investors|
|4 December 2020||publishing the Final Price for the New Shares for Retail Investors, the Final Price for the New Shares for Institutional Investors, the Final Price for the New Shares in the Employee Tranche, the final number of the Offer Shares being offered under the Offering and the final number and class of the Offer Shares being offered to individual classes of investors|
|7 – 9 December 2020||acceptance of subscriptions from the Institutional Investors|
|up to 10 December 2020||potential subscriptions from Substitute Investors|
|up to 11 December 2020||allotment of the Offer Shares|
|approx. 2 weeks from Allotment Date||assumed first day of listing of the existing shares and right to the New Shares on the Warsaw Stock Exchange|
|approx. 6 weeks from Allotment Date||assumed first day of listing of the New Shares on the Warsaw Stock Exchange|
Subscriptions for the New Shares in the Retail Investors tranche will be accepted in the selected Customer Service Points (CSP) of the Global Coordinator and in the customer service points accepting subscriptions from members of the Retail Investors Consortium.
A Retail Investor may place a subscription for no less than 100 New Shares and no more than 100,000 New Shares. Each Investors may submit more than one subscription order.
A list of the Customer Service Points of the Brokerage Houses accepting subscriptions for PCF Group S.A. shares can be found on the Company’s web site.
PCF Group S.A. will be advised in the IPO process by: Trigon Dom Maklerski – Global Coordinator, Greenberg Traurig Grzesiak — legal counsel, Grant Thornton — auditor and cc group — as investor relations and public relations advisor.
More about the company at:
Outriders in social media:
For further information, please contact:
Contact for media:
Michał Wierzchowski, cc group
tel. +48 531 613 067
This document is for advertising purposes only and should in no circumstances be used as a basis to make decisions on purchasing or subscribing for securities of PCF Group S.A. with its registered office in Warsaw (the “Company”).
This announcement relates to (i) the public offering of the Company’s shares (the “Offered Shares”) in the territory of Poland (the “Offer”) and (ii) the seeking of admission and introduction of the Company’s securities, including the Offered Shares to trading on the regulated market (main market) operated by the Warsaw Stock Exchange (the “Admission”). This document is an advertisement within the meaning of the Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (the “Prospectus Regulation”) and Commission Delegated Regulation (EU) 2019/979 of 14 March 2019 supplementing Regulation (EU) 2017/1129 of the European Parliament and of the Council with regard to regulatory technical standards on key financial information in the summary of a prospectus, the publication and classification of prospectuses, advertisements for securities, supplements to a prospectus, and the notification portal, and repealing Commission Delegated Regulation (EU) No 382/2014 and Commission Delegated Regulation (EU) 2016/301. This announcement is not a prospectus or any other offering document within the meaning of the law including Prospectus Regulation and the act of 29 July 2005 on public offerings and conditions for the introduction of financial instruments to organized trading, and on public companies.
On 25 November 2020 the Polish Financial Supervision Authority (Komisja Nadzoru Finansowego) approved the prospectus (the “Prospectus”) that has been prepared in relation to the Offer and the Admission. The Prospectus, constitutes, together with all duly approved and published supplements and published updating announcements, as well as with information on the final price of the Offer Shares for particular categories of investors and the final number of the offer shares to be offered in the Offer, as well as information on the final number and categories of the Offer Shares to be offered to particular categories of investors (once prepared and published) the only legally binding document containing information on the Company, the Offer and Admission. The Prospectus has been published and is available on the Company’s web site (www.peoplecanfly.com) and additionally, for information purposes only, on the web site of the Global Coordinator – Trigon Dom Maklerski S.A. with its registered office in Kraków (www.trigon.pl). The Prospectus is the only legally binding offering document containing details regarding the Company, Company’s shares (including Offered Shares) and the Offering for the purposes of the Offering and the Admission.
Any subscriptions for the Offered Shares under the Offer should be made solely based on the information contained in the Prospectus.
The approval of the Prospectus by the Polish Financial Supervision Authority should not be construed as its endorsement of the securities offered in the Offer or subject to the Admission. Potential investors should carefully analyze the whole Prospectus, in particular the risks connected with the investment in shares included in the “Risk factors” section of the Prospectus and the terms of the Offering. Any investment decisions pertaining to the securities of the Company should be made only after analyzing the whole Prospectus together with all duly approved and published supplements and published updating announcements, as well as with information on the final price of the offer shares for particular categories of investors and the final number of the offer shares to be offered in the Offer, as well as information on the final number and categories of the offer shares to be offered to particular categories of investors (once prepared and published).
Providing investment, legal, tax or financial advice is not the purpose of this announcement. Data contained herein is valid as at the date of its publication and consequently may become obsolete due to variety of reasons. Since this announcement is an advertisement you should not rely on its completeness. None of the data contained herein should in themselves be the basis of any investment decisions.
This announcement is not a disclosure recommending or suggesting an investment strategy, in particular it is not an investment recommendation within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and the Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest.
This announcement does not constitute an offer or invitation to subscribe for or acquire any securities of the Company in the United States, Australia, Canada, Japan or in any other jurisdiction where to do so would constitute a violation of the relevant laws or require registration.
THIS DOCUMENT IS NOT FOR DISTRIBUTION, ANNOUNCEMENT OR PUBLICATION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION OR REQUIRE ANY REGISTRATION, APPLICATION OR OBTAINING A PERMIT IN SUCH JURISDICTION.
Securities cannot be sold in the United States if they were not registered with the United States Securities and Exchange Commission or are not exempt from the registration obligation pursuant to the applicable provisions of the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”). The securities referred to herein have not been and will not be registered under the U.S. Securities Act or by any authority regulating the trading in securities of any state or under the jurisdiction of the United States and cannot be offered, sold, encumbered or transferred in other way in the territory of the United States.
Neither the Prospectus nor the securities of the Company covered thereby have been or will be subject to registration, approval or notification in any country other than the Republic of Poland and they cannot be offered or sold outside the territory of the Republic of Poland (including within the territory of other member states of the European Union, United States of America, Australia, Canada and Japan). Any investor that resides in or has its registered office outside the Republic of Poland should review the relevant regulations of Polish law as well as the regulations of other countries that may apply thereto in connection with their participation in the Offering.
This communication must not be published or otherwise transmitted, distributed or sent, directly or indirectly, in whole or in part, in or into the territory of the United States of America or among U.S. persons (as defined in Regulation S under the US Securities Act), or in or into the territory of Australia, Canada or Japan, or any other jurisdiction where the distribution of this communication would violate any applicable laws or regulations, or require any registration or license therein. A failure to comply with this directive may result in a violation of the U.S. Securities Act or the applicable laws of other jurisdictions.
This announcement may contain forward-looking statements. The forward-looking statements rely on many assumptions concerning the current and future activities of the Company or its group (the “Group”) and their present and future environment. These assumptions concern, in particular, the Company’s or Group’s ability to successfully implement its strategy, the expected profitability, growth rate and developments in the Company’s industry. The forward-looking statements are based on an evaluation of the Company today and, naturally, on the circumstances that will occur in the future. As such, they depend on a number of known and unknown issues related to various risks that are beyond Company’s control. This means that some material risks may cause the actual future developments to deviate significantly from the forward-looking statements, and thus cause the Company’s or Group’s actual performance, financial condition or prospects to significantly deviate from those described in or implied by the forward-looking statements, or the Company’s and Group’s historical performance and achievements.
The Company, the Company shareholders selling shares in the Offer (the “Offerors”) and Trigon Dom Maklerski S.A., each with its respective affiliates, explicitly renounce any obligations or liability to update, verify or adjust any forward-looking statements that may be included in this announcement, whether with respect to the availability of new information or to the occurrence of future events, or otherwise.
Neither Trigon Dom Maklerski S.A. nor any of the Offerors, their directors, members of corporate bodies, employees, advisors or proxies, assume any liability or make explicitly or by implication any statements or representations concerning the accuracy, fairness or completeness of the information provided in this document (or concerning any omissions of information from this document), or any other information concerning the Company, its subsidiaries or affiliates, whether oral, visual, written or electronic, however transmitted or divulged, or for any losses resulting from reliance on this communication or its content, or occurring in relation to this communication or its content.
The acquisition of the securities referred to in this communication may expose the investor to a significant risk of forfeiting the invested amount. All persons contemplating such an investment should consult a professional investment advisor. This announcement is not a recommendation concerning the Offer The value of the shares may be increased or decreased. A potential investor should seek professional investment advise whether this Offer is appropriate for its needs.