Starbreeze acquires Visual Effects Studio and PresenZ technology creator Nozon for 7.1 MEUR

STOCKHOLM, SWEDEN (October 25, 2016) Starbreeze AB, an independent creator,
publisher and distributor of high quality entertainment products, today
announced its acquisition of the Belgian Visual Effects (VFX) studio and PresenZ
technology creator Nozon, for a total consideration of 7.1 MEUR, whereof 4.6
MEUR (approximately 44.6 MSEK) in cash and 2.5 MEUR in newly issued Starbreeze B
-shares.

In addition, the parties have agreed on a capped ten-year earn-out for Nozon
founders based on PresenZ future financial performance, taking effect after
Starbreeze has recouped 2 MEUR of its investment. During the earn-out period,
Starbreeze will pay a percentage on certain of its revenues benefitting from the
PresenZ technology.

Since 1998, Nozon has steadily grown to become a well-known, award winning and
established reference in VFX quality thanks to the company’s artistic approach
and strong R&D development. Clients trust Nozon every day to achieve complex VFX
and 3D animation in their products.

Further innovating and honing their skills, Nozon in 2015 introduced PresenZ, a
revolutionary technology for immersive virtual reality (VR) movies. PresenZ
allows for interactive parallax in virtual reality and delivers high quality
blockbuster computer graphics (CG) with true immersive feeling. Interactive
parallax is a technique to enhance viewers’ perception of perspective and view
depth, adding to the immersive feeling.

By joining the Starbreeze family, Nozon will instantly be part of Starbreeze
technology offering and a solid part of the VR ecosystem.

“PresenZ technology for multiple virtual reality applications will allow for
room scale scanning and virtualization, and high quality computer graphics
rendering at almost movie level polygon counts. The technology’s parallax
capabilities will greatly complement the high fidelity of the StarVR HMD with
its 210-degree field of view,” said Starbreeze CEO Bo Andersson Klint. “The
future of VR is undefined but it is easy to imagine with this technology, where
a space can be scanned and rendered in high quality CGI, the applications where
you could render a space like the Louvre in Paris or Saint Mark’s Basilica in
Venice, and provide interactive guided tours. Additionally, one could
potentially use computer graphic assets from a blockbuster Hollywood movie to
create a cinematic VR experience.”

To complete the deal, the Board resolved to issue 1,048,842 B-shares under its
mandate from the AGM, based on a market share price determined at SEK 23.1 and
an exchange rate of 9.6913. The issue represents 0.3% of the capital and 0.1% of
the votes on a fully diluted basis. After the transaction, the total number of B
-shares in Starbreeze is 218,382,124.

The founders of Nozon will have industry standard lock-in agreement attached to
the shares, equally distributed over three years. The ongoing VFX business of
Nozon will have a limited but positive impact on Starbreeze revenue and profit
from day one. In 2015, Nozon had revenues of 2.3 MEUR.

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Media assets:

Nozon acquisition announcement video on YouTube: https://youtu.be/jdTJFua23jo
For more information, please contact:

Maeva Sponbergs, EVP of Communication and Head of Investor Relations, Starbreeze
AB
Tel: +46(0)8-209 208, email: ir@starbreeze.com

This information is information that Starbreeze AB is obliged to make public
pursuant to the EU Market Abuse Regulation. The information was submitted for
publication, through the agency of the contact person set out above, at 8:15 CET
on October 25, 2016.
About Starbreeze

Starbreeze is an independent creator, publisher and distributor of high quality
entertainment products. With studios in Stockholm, Paris and Los Angeles, the
company creates games and other virtual reality entertainment products, based on
proprietary design and licensed content.

Starbreeze's most recent games include PAYDAY 2® , the upcoming John Wick VR
shooter and upcoming survival co-op FPS OVERKILL’s The Walking Dead. Under its
publishing initiative, Starbreeze has together with Canadian studio Behaviour
Digital successfully launched horror thriller Dead by Daylight.

Starbreeze has set out to develop truly immersive virtual reality experiences,
by integrating software and hardware in its StarVR® head mounted display, to be
produced together with Acer, displaying a unique field of view and a mission to
bring top-end VR to large audiences. Together with IMAX, Starbreeze aspires to
dominate the location based VR market with the IMAX VR centers, set to premiere
in its first location in Los Angeles during 2016.

Headquartered in Stockholm, Sweden, Starbreeze's shares are listed on Nasdaq
Stockholm First North Premier under the tickers STAR A and STAR B with the ISIN
-codes SE0007158928 (A-share) and SE0005992831 (B-share). Remium Nordic is the
company's Certified Adviser. For more information, please
visit http://www.starbreeze.com, http://www.starvr.com, http://www.overkillsoftw
a 
re.com