2020.07.02(목)

전체기사

Anchor Equity Partners bets on Kakao M This is the PE firm’s third investment in the content industry

Translated by Ryu Ho-joung 공개 2020-03-20 08:00:09

이 기사는 2020년 03월 20일 08:00 더벨 유료페이지에 표출된 기사입니다.

Anchor Equity Partners is set to invest in South Korea’s entertainment company Kakao M Corp. – a move seen as an extension of the PE firm’s focus on the content industry.

Kakao M, a subsidiary of the country’s massaging giant Kakao, announced Monday that Anchor Equity Partners and other global investment firms will invest total 210 billion won in the company.

Anchor Equity Partners will buy more than 1.14 million new shares issued by Kakao M through a third-party allocation, in a deal that valued the company at 1.7 trillion won.

The transaction will occur in two stages, with the purchase of about 0.93 million shares expected to complete in April and the purchase of the remaining shares in May. The completion of the transaction would make the PE firm the second largest shareholder in Kakao M with a 12.9 percent stake.

Kakao M is the PE firm’s third investment in the country’s content industry, following Kakao Page Corp. and Line Games Corp.

Anchor Equity Partners invested 125 billion won in Kakao Page in December 2016 in a deal that valued the company about 500 billion won. Kakao Page, which is also a subsidiary of Kakao, operates the country’s biggest content platform of the same name as well as webtoon platform Daum Webtoon. The company has used the proceeds from the investment to secure intellectual property, with an aim of expanding its business areas from mobile-based novels and cartoons to video content and advertising.

Kakao Page has grown at a rapid pace for the last four years, with improvement in profitability. Kakao Page’s enterprise value was estimated at about 1.25 trillion won when the company’s board of directors approved an issue of additional shares in June 2019. The company is also preparing for an IPO, with analysts putting its value at up to four trillion won given its high growth potential.

Kakao Page – which not only has intellectual property rights related to online cartoons and novels but also a platform to distribute content – is considered a core element of the content value chain within Kakao. For example, a Korean TV show based on an online novel published serially in Kakao Page was aired in 2018, which was a big hit.

Meanwhile, Kakao M is focusing on producing original content, as well as continuing efforts to acquire local entertainment companies with pop artists who have hallyu, or the Korean Wave, fandom. Therefore, Anchor Equity Partner’s investment in Kakao M is seen as an extension of its previous investment in Kakao Page, and the decision should have been based on the growth potential of Kakao’s content business, industry watchers said.

“We decided to invest in Kakao M which has infinite growth potential with its strong capability to create content as well as its business structure that could expand content offerings based on intellectual property and thereby generate synergies,” Anchor Equity Partners said.

Anchor Equity Partners also invested 125 billion won in Line Games, a subsidiary of Line Corp., in October 2018 to acquire 27.55 percent of the company.

(By reporter Han Hee-yeon)
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