LEAF Mobile Inc (TSX:LEAF, OTCQB:LEMLF), the smartphone games group, has announced its intention to join the main market of the London Stock Exchange (LSE) this winter.
The company, which started trading its common shares on the Toronto Stock Exchange (TSX) on February 10, 2021, will assume a dual-listed structure.
Its common shares will continue to be listed and traded on the TSX in Canada under the symbol LEAF, as well as trade on the OTC Markets Group Inc's OTCQB Marketplace in the United States under the symbol LEMLF.
The company intends to raise gross proceeds of approximately C$10 million and the flotation is expected to value LEAF Mobile at approximately £130 million.
This secondary London listing is part of LEAF's growth strategy and brings Canada's largest free-to-play mobile game group to the LSE. The net proceeds of the capital raising will be used to further scale the business.
LEAF is operating within a fast-growing sector with a rapidly increasing total addressable market. Mobile games are the world's most popular form of gaming, with an expected 2.6 billion players generating revenues for the industry of U$90 billion in 2021, representing more than half of the global games market in terms of revenue, according to Newzoo data.
Games are also the most dominant category within the mobile applications ecosystem with gaming accounting for more revenue on Apple's iOS than every other category combined. Games accounted for 66% of all App Store revenue in 2020, according to Sensor Tower data which also found that approximately U$47.6 billion was spent on iOS games in 2020, up 25% from 2019.
In a statement, Darcy Taylor, founder and CEO of LEAF Mobile, said: "The mobile games market will gain increasing popularity in the next ten years, with free-to-play games acting as the industry's foremost segment.
"London is a global hub for video gaming, creative industries and technological innovation and a London Stock Exchange listing will help LEAF Mobile to position itself at the forefront of the sector's growth.
"Moreover, the dual listing will provide us with a springboard to achieve our ambitious growth objectives in Europe and enhance our access to London's deep and advanced capital markets."
The company is providing retail investors the opportunity to participate in the raise exclusively through the PrimaryBid mobile app available on the Apple App Store and Google Play. PrimaryBid does not charge investors any commission for this service.
Tennyson Securities is acting as bookrunner and corporate broker for the company.
LEAF considers that admission to trading on the Main Market of the LSE will:
- Allow the company to access a wider range of potential investors and broaden its investor base
- Enable the company to reach institutional investors in the U.K. and Europe;
- Increase share trading liquidity
- Assist the company in establishing a European base of operations in London as it expands through M&A activities and the hiring of additional staff
- Boost the profile of the company as the UK capital markets are recognised by both UK and international gaming companies and the UK enjoys a sophisticated investor base familiar with the sector
LEAF was incorporated in 2018 with the objective to lead the free-to-play mobile game space through a distributed development & publishing studio structure and proprietary Game Kit software that can change the framework of mobile game companies.
It is the parent company of a group comprising operating subsidiaries LDRLY, a developer and publisher of 'casual or idle mobile games'* for mobile that was acquired on April 17, 2020, and East Side Games (ESG), a mobile game developer and publisher specialising in free-to-play casual mobile games that was acquired on 5 February 2021.
The company is best known for famous franchise game titles and currently publishes and operates an 11-game portfolio. Among these, some of ESG's successful franchise titles include Trailer Park Boys: Grea$y Money, currently streaming on Netflix; RuPaul's Drag Race Superstar, based on the award-winning reality TV show; Archer: Danger Phone; and It's Always Sunny: The Gang Goes Mobile.
The company's revenues are primarily generated through in-app purchases or in-game advertising sold to third parties. Additionally, the Company derives income from the licensing of proprietary software technology "Game Kit" to third-party developers.
LEAF Mobile revenue year to date as of September 30, 2021's as reported was C$64.6 million, a 32.1% rise compared to the same period last year.
Contact the author at jon.hopkins@proactiveinvestors.com