South Korea’s leading mobile game company Netmarble Games has entered the race to acquire Israel-based social casino game developer Playtika in a deal valued at up to $4 billion, multiple sources in the local investment banking industry said Tuesday.
If successful, the deal would mark the largest acquisition by a Korean game company to date and significantly boost Netmarble’s market value ahead of its initial public offering scheduled for next year.
According to local news reports, Netmarble has submitted an initial bid to acquire Playtika through its advisor Morgan Stanley and will participate in the next round of bidding Thursday.
It is set to compete against several Chinese game companies and foreign private equity funds which have also reportedly expressed interest in buying the Israeli gaming company, which racked up some $725 million in sales last year.
Netmarble is looking to finance some 3 trillion won ($2.57 billion) from Korean institutional investors, including NH Investment & Securities to fund the potential acquisition, sources said.
A Netmarble spokesperson declined to comment, neither confirming nor denying the deal in progress.
The recent move comes as Netmarble looks to raise its brand value and market capitalization through strategic mergers and acquisitions ahead of its initial public offering scheduled for next year.
“Netmarble is expecting a market capitalization of more than 10 trillion won after its public listing. And the firm is attempting to meet this goal by acquiring profitable, foreign game companies,” an unnamed official from the gaming industry told Seoul-based Maeil Business Newspaper.
Netmarble’s acquisition of Playtika, if successful, would drive up the Korean game company’s sales to more than 2 trillion won, in turn significantly raising its market value, according to local industry estimations. Netmarble posted a record 1.73 trillion won in sales last year, up 86 percent on-year.
Based in Tel Aviv, Playtika is the creator of several casino games for mobile devices and social media platforms, including Slotomania and Caesars Casino, which receive high rankings on Google and Facebook. It is owned by Caesars Interactive Entertainment, a subsidiary of America’s biggest casino operator Caesars Entertainment.
Playtika, whose sales have been rising annually since it was acquired by CIE 2011, was reportedly put on the market amid financial struggles at CIE’s parent company Caesars Entertainment.
By Sohn Ji-young (
jys@heraldcorp.com)