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S.Korea's Netmarble eyes $4.4 bln war chest for acquisitions after IPO
April 18, 2017 / 8:13 AM / 5 months ago

S.Korea's Netmarble eyes $4.4 bln war chest for acquisitions after IPO

* Netmarble’s IPO could be S.Korea’s 2nd-largest ever

* Will seek bigger M&A targets with $4.4 bln war chest

* Helped by recent blockbuster game “Lineage II: Revolution”

By Joyce Lee

SEOUL, April 18 (Reuters) - South Korea’s Netmarble Games Corp said on Tuesday it expects to have a war chest of some $4.4 billion for acquisitions after an imminent IPO, and plans to roll out its new blockbuster game to Japan and China this year.

While little known in the West, Netmarble has scored big with its latest role-playing game “Lineage II: Revolution”, which became the world’s best-selling mobile game in February despite only being available in South Korea.

That has added momentum to an offering expected to raise as much as 2.7 trillion won ($2.4 billion) - possibly South Korea’s second-largest ever listing.

The nation’s largest mobile game company, backed by Chinese internet giant Tencent, will be wrapping up bookbuilding on Thursday. It is due to list on May 12.

“We’ve gotten a lot of interest from pension funds or sovereign wealth funds from various countries - interest from such long-term investors is encouraging,” Choi Chan-seok, director of corporate strategy, told a briefing.

Money from the IPO and cash flow this year, plus borrowings will mean it will have a war chest of about 5 trillion won for acquisitions, the company said, adding that it will look for bigger targets than previously.

The company does not have any specific candidates but will look at acquiring game developers and intellectual property holders.

Netmarble acquired U.S. game developer Kabam’s Vancouver studio in February for $710 million, according to a filing.

Released in mid-December, sales of “Lineage II: Revolution” exceeded Mixi’s Monster Strike and Supercell’s Clash Royale in February, according to games data provider SuperData. Netmarble said revenue for the game was 206 billion won ($180 million) in its first month of sales.

It plans to launch the game in Japan in the third quarter and in China in the fourth, hoping for a thaw in relations between Seoul and Beijing - currently at odds over a planned anti-missile system in South Korea - before then.

CEO Kwon Young-sig said he believes the game could rank among the top three in China.

JPMorgan and NH Investment & Securities are advising the IPO.

$1 = 1,140.3300 won Reporting by Joyce Lee; Editing by Edwina Gibbs

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