Netmarble Games is the Second Biggest IPO in South Korea

The largest mobile games maker in South Korea, Netmarble Games Corp, managed to raise about $2.3 billion in the second-biggest IPO of the country. This share sale occurred only weeks after one of its titles that’s sold only domestically became the best-selling mobile game in the world due to the number of sales. According to analysts, the initial public offering (IPO) of the company was priced at the top end of the indicative range, which was to be expected because of Netmarble’s ability of publishing popular and hit games in the fast-paced and immensely competitive mobile sector.

Released in December, their most recent role-playing game titled ‘Lineage II: Revolution’, was termed as the biggest earner in the world in February by SuperData, the games data provider. The game managed to claim this prize even though it was only available in the company’s home country. After China, the United States and Japan, South Korea holds the fourth position in the games market and the annual revenue from the industry is approximately $4 billion as per the data collected in June 2016. Analysts said that not only has Netmarble released a mega-hit game that had never been seen before, but they also have a strong lineup of upcoming games in the mobile gaming industry, even though it takes most companies some time to release new games.

The analysts further said that the amount of shared offered in the IPO were considerably less than the demand in the market. A total of 17 million shares were offered for sale by Netmarble, which is only 20% of the company. The shares were priced at the top of the indicative range, which was about 157,000 won whereas the bottom was around 121, 000 won. The firm was able to earn $2.3 billion, which is equal to 2.66 trillion won, and was valued at about 13.3 trillion won. Last year, Samsung BioLogics Co had been listed at 2.25 trillion won, but Netmarble managed to surpass it and is only second to the IPO of Samsung Life Insurance Co Ltd, which was about 4.9 trillion won in 2010.

Backed by Tencent Holdings Ltd of China, Netmarble said earlier this week that it was planning to use the proceeds as well as its cash flow and borrowings for raising 5 trillion won for the purpose of acquisitions. These acquisitions would allow the gaming company to expand its share of the growing gaming market in Europe and North America. Thus, by the year 2020, it would be able to become a top-five games company. Recently, the games industry has seen a series of high-profile acquisitions and mergers as firms are consolidating for expanding their market share.

One such example is the agreement to purchase the online games unit of Caesars Interactive Entertainment Inc. for $4.4 billion by a consortium that comprises of Alibaba Group Holding Ltd founder Jack Ma and Shanghai Giant Network Technology Co Ltd. The deal is expected to close in June and would be a major change in the gaming industry.