Mercia Asset Management PLC

("Mercia", the "Group" or the "Company")

nDreams receives significant new third-party investment

Mercia Asset Management PLC (AIM: MERC), the proactive, regionally focused specialist asset manager with c.£948million of assets under management, is pleased to announce completion of a £20.1million third-party investment round into nDreams Limited ("nDreams"), currently the Group's largest direct investment by fair value.

The investment comes from Aonic AB ("Aonic"), a Stockholm-based video game investor. Aonic champions high-potential game studios by supporting them with the specialist technology and infrastructure needed to achieve their full potential, while enabling them to maintain their independent identity and creative freedom.

Following this investment round, Mercia now holds a 33.2% fully diluted direct investment stake in nDreams valued at £25.8million, an increase of £8.1million from its 30 September 2021 carrying value, which will have a consequential positive impact on both operating profit and net assets as at 31 March 2022.

nDreams is a leading developer and publisher of virtual reality ("VR") games including Phantom: Covert Ops, Fracked and Far Cry VR: Dive Into Insanity. It has a strong pipeline of future projects already in development, including games for the PlayStation VR2. It also recently expanded its development capabilities by announcing two new studios, nDreams Studio Orbital and nDreams Studio Elevation. In August 2021, nDreams appointed former Codemasters CEO, Frank Sagnier, as its Non-executive Chairman.

Julian Viggars, CIO of Mercia Asset Management and nDreams' Board Director, said: "This is an important development for nDreams and one that will enable it to further strengthen its position as a leading studio in the VR market. Aonic's investment is also an indicator of the potential scale of VR technology and nDreams is well placed to capture the opportunities this presents. This material fair value increase is another example of the underlying value creation potential in our direct investment portfolio, which is now being recognised by co-investors and acquirers."

Patrick O'Luanaigh, co-founder and CEO of nDreams, said: "This investment is a pivotal moment for nDreams, and I'm delighted to now have the combined support of Mercia and Aonic, who share the same ambitious vision that we do. This investment is the rocket fuel needed to accelerate our rapid growth, as VR continues its trajectory towards becoming a truly mass-market technology."

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. Upon publication of this announcement, this inside information is now considered to be in the public domain.

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About Mercia Asset Management PLC

Mercia is a proactive, specialist asset manager focused on supporting regional SMEs to achieve their growth aspirations. Mercia provides capital across its four asset classes of venture, private equity, debt and proprietary capital: the Group's 'Complete Connected Capital'. The Group initially nurtures businesses via its third-party funds under management, then over time Mercia can provide further funding to the most promising companies, by deploying direct investment follow-on capital from its own balance sheet. 

The Group has a strong UK footprint through its regional offices, 19 university partnerships and extensive personal networks, providing it with access to high-quality deal flow. Mercia currently has c.£948million of assets under management and, since its IPO in December 2014, has invested c.£116million gross into its direct investment portfolio.

Mercia Asset Management PLC is quoted on AIM with the EPIC "MERC".