Blue Star Capital’s NFT Investments proposes to acquire Pluto Digital for £96m

Post date Feb 2022

NFT Investments, an investment firm that specialises in non-fungible tokens (“NFTs”), has entered into a non-binding letter of intent (“LOI”) to acquire Pluto Digital PLC (“Pluto”), a crypto venture capital and technology company, for a total consideration of £96 million.

NFT Investments, an investee company of Blue Star Capital, an investment company which is focused on esports, payments, technology and applications within media and gaming, told investors last week that it intends to acquire 100% of the issued share capital of Pluto.

The proposed acquisition, which is conditional on shareholder approval, is expected to create a significant global metaverse company and advance NFT’s investments in the non-fungible tokens sector as the Pluto Ventures division has invested heavily in NFTs and NFT gaming.

Pluto has acquired a ‘successful track record’ in the past 12 months, NFT Investments noted, with the firm having released a DeFi token which is now trading on global crypto exchanges. 

Pluto has also, amongst other things, established a venture capital arm, Pluto V, which has made investments in a range of Web3 projects and NFT assets which performed well in 2021.

Pluto is now working alongside the video game developer Maze Theory to release games that incorporate token economics. Blockchain games, or ‘Play2Earn’, have created ‘substantial value’ led by Sky Mavis and Axie Infinite, and are worth $3bn and $19bn in total, respectively. 

The acquisition, if completed, will result in Pluto shareholders holding 70.5% of the enlarged business on completion. The acquisition is expected to be made by way of a scheme of arrangement by Pluto and will be conditional upon approval by its shareholders and the court.

NFT will have a 90-day exclusivity period to conduct due diligence on Pluto. Concurrent with, and as a condition to, the completion of the Acquisition, three Pluto team members will join the company as directors and Jonathan Bixby will continue to serve as Executive Chairman.

In addition, NFT will loan Pluto £5m on signing the LOI, the proceeds of which will be used to complete the strategic acquisition of a number of technology companies in the metaverse sector, it noted. The loan will accrue 10% interest and will be repayable on 30 days’ notice if Pluto terminates the transaction and on 90 days’ notice if NFT terminates the transaction.

Jonathan Bixby, Executive Chairman of NFT said: “We are very excited about the prospects of Pluto and NFT merging to create a large global metaverse company. This is a transformational deal that will provide us with the scale to expand and diversify our investment portfolio in a rapidly growing sector and thereby create long term value for shareholders.”

To date, Blue Star Capital has invested £0.2m into the IPO of NFT which began trading on the AQSE Growth Market back in April 2021 following a “substantially oversubscribed” placing. 

NFT Investments is operating as the first pure-play investment firm focused exclusively on investing in non-fungible tokens to launch on a stock market in a major jurisdiction worldwide. 

NFT was launched by the co-founders of Argo Blockchain to invest in non-fungible tokens, a specialised class of assets that certifies authenticity and proof of ownership of digital assets. 

At the time, Bixby said the IPO of NFT Investments marked “a significant milestone for the non-fungible sector” and that a “record-breaking” raise provided “a strong foundation on which it could execute its long-term growth strategy and capitalise on its first-mover advantage.”