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Mindflair shares soar as investee Landvault is acquired by Infinite Reality in $450m deal

06:46, 10th July 2024
Victor Parker
Vox Newswire
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Mindflair (MFAIFollow | MFAI, an AI-focused tech investment company, noted a major announcement by Infinite Reality (IR), which has agreed to acquire Landvault in an all-share deal valued at US$450m. Landvault is a portfolio company of the Sure Valley Ventures Fund (SVV1), in which Mindflair has a significant investment.

SVV1 has a 7% shareholding in Landvalut and Mindflair has a 13% direct interest in SVV1. Mindflair also has a 5.3% indirect interest in SVV1 via its 21.3% holding in Sure Ventures, which runs the SVV funds. Consequently, Mindflair has a combined direct and indirect interest in SVV1 of c. 18%.

MFAI stock soared 170% to 1.5p on the announcement. Shares have since consolidated to 1.01p or 80% higher than the pre-announcement price.

Landvault will receive new shares in IR as purchase consideration. After the acquisition, the company is expected to seek a listing on Nasdaq in Q3 2024 in combination with its SPAC partner, Newbury Street Acquisition Corp.

Separately, IR announced a US$350m minority investment from a 'private multi-family office focused on global technology, media, and real estate' increasing IR's valuation to US$5.1bn.

Nicholas Lee, Director of Mindflair, commenting: "This is a very exciting and potentially material development for Mindflair given its significant exposure to SVV1. We very much look forward to further news regarding iR's proposed listing."

John Acunto, co-founder and CEO of Infinite Reality, commenting: "Now, having joined forces with Landvault and secured this $350 million fundraise, we possess robust capitalisation, financial flexibility, and a fortified position from which to execute our global go-to-market strategy successfully."

 

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A major announcement from digital media and ecommerce company Infinite Reality, which has agreed to acquire Landvault in an all-share transaction worth US$450m. Landvault is a tech company focused on immersive technology and digital twins for large corporate and government clients. Landvault is a portfolio investee of the SVV1 fund in which AI-focused holding company Mindflair has a significant 18% combined interest.

The acquisition is expected to materially increase the valuation of Mindflair. The disposal has the potential to generate proceeds for Mindflair of c. US$6m, depending on the value of IR shares, a c. 470% increase in SVV1's carry value of Landvault as of December 31, 2023, and a significant increase in the fund's NAV from December 2023. MFAI shares soared on the announcement.

At the same time as IR announced the acquisition of Landvault, it announced a US$350m fundraise from a private investor. MFAI investors should expect further details once IR publishes the specifics of its proposed listing on Nasdaq, although there is not yet a guarantee that a listing will ultimately take place.

IR focuses on digital media and ecommerce through AI and immersive technologies. The company has significant experience in Hollywood production and extended reality (XR). IR's portfolio includes Drone Racing League, XR production facility Thunder Studios, creator talent management firm TalentX, and digital marketing agency Fearless Media.

IR is backed by major investors, including  RSE Ventures, Liberty Media, Lux Capital, Lerer Hippeau, MGM, CAA, T-Mobile Ventures, Courtside VC, Exor, Terracap, IAC, Live Nation, and others. Following the acquisition, the Landvault and IR teams will be integrated, and the former will become the Middle East arm of IR to support expansion across the region.

The SVV1 fund is managed by SVV, which even before today's announcement was performing very well after multiple realised cash and liquidity events and upward revaluations. In our estimation, MFAI remains undervalued, given the scope for material valuation uplift of the companies within its portfolio, clearly evidenced by today's announcement.

Continued projected growth of the AI sector, and progress reported so far across the SVV1, SVV2 and the new SVV3 funds through which MFAI invests, have bolstered investor confidence in the company's portfolio. Still, MFAI's NAV/share remains very attractive compared to its current share price.

We expect to see more realisations and liquidity events from MFAI's portfolio in the coming months as SVV1 has now completed its deployment phase and entered a realisation phase, expected to generate further cash inflows for MFAI.

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