THQN B

THQ Nordic

Research note

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THQ Nordic: Loading the big guns

Yesterday, after the market closed, THQ Nordic announced the intention of a directed share issue. The placement was successful, and the company has issued 7.7 million B shares and raised approximately SEK 1.45bn. The proceeds will be used to finance new acquisitions and enable a higher rate of investment (game development) within the company. We feel extremely confident in the management’s profound capital allocation skills and that the money will be put to good use. We make no changes to our valuation despite the small dilution. The big guns are now loaded; we wonder what the target(s) will be!

The subscription price amounted to 188 SEK per share and created a dilution of approximately 8.7%. More details about the issue can be found here. In our latest research report we put an extra focus on the value creation capabilities of THQ Nordic, please read it for a more in-depth discussion.

Before the current issue the company had raised about SEK 838m in total funds and created a company worth north of SEK 16bn, that’s a 19x value return. We are not suggesting that the SEK 1.45bn will lead to a value appreciation of over SEK 27bn; we do however want to state that the money is in good hands. We do not make any changes to our valuation of the company. Our Base-case valuation amounts to 212 SEK per share, a quality company like THQ Nordic seldom looks cheap on paper. The big guns are now loaded; it will be exciting to see what the target(s) will be!

Download our latest Research Report from 2018-06-08

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