Mercia Asset Management PLC (AIM:MERC) has successfully disposed of its largest direct investment nDreams, the leading virtual reality studio specialising in developing and publishing VR games, in a profitable sale to diversified video gaming investment group Aonic.
Mercia held a 33.2% direct stake in nDreams, resulting in a total consideration of £30.2 million thus valuing the company at more than £90 million.
The sale, comprising £26.4 million in cash proceeds and £3.8 million reinvested into Aonic itself, resulted in a 2.7-times return on invested capital and an 18.8% initial rate of return.
nDreams is headquartered in Farnborough and was founded by Patrick O'Luanaigh in 2006. Mercia's initial investment of £300,000 was made in March 2014 through its managed funds, with the croup first investing from its own balance sheet in December 2014.
Dr Mark Payton, chief executive of Mercia, commented: "This trade sale represents another profitable outcome for Mercia, realising a significant return which is above our current holding value, predominantly in cash.
“This latest successful exit further adds to our strong debt-free cash position, which now stands at £60 million.”
Julian Viggars, chief investment officer of Mercia and nDreams board member, added: "When we first invested in nDreams we had a high conviction in the potential of VR gaming, and this realisation is a strong validation of that thesis. We have proactively supported nDreams since 2014 and are pleased that we will continue to benefit from their continuing growth as part of Aonic, through our partial reinvestment.
“We look forward to nDreams continuing on its exciting VR and AR journey within a larger gaming group and congratulate Patrick O'Luanaigh and his nDreams team on all that they have achieved thus far."
Mercia will disclose its interim results on 28 November.