CVC backs take-private of Hong Kong-listed Razer

Min-Liang Tan, the company’s co-founder and CEO, and Kaling Lim, a founding investor and non-executive director, together hold a 57.8% stake, which they would roll over into the acquisition vehicle. They are offering to buy the remaining shares for HK$2.82 apiece, paying up to HK$10.8 billion, according to a filing. CVC will commit equity as part of this process and take a 32.1% interest.

Razer, which raised HK$3.93 billion through an IPO in 2017 that represented a liquidity event for several private investors, saw its share price hit a nine-month high of HK$3.05 in late November. The stock ended trading down 7.5% at HK$2.46 on December 2, the day the proposed deal was announced. It recovered slightly to close at HK$2.49 on December 3.

CVC is participating through its fifth pan-Asian fund, which closed at $4.5 billion in 2020. The transaction is structured as a partnership deal, with the private equity firm getting two of the six board seats and an agreement in place to facilitate its exit within five years.

Razer was established by Tan, an ex-lawyer, and Robert Krakoff in 2005, and it initially had dual global headquarters in California and Singapore. The primary base is now in California, with regional headquarters in Singapore, Shanghai, and Hamburg.

The company produces peripherals such as headphones, microphones, joypads, mice, and webcams, as well as branded lifestyle products. On the software side, it offers platforms designed to enhance hardware performance and allow personalization. There were approximately 123 million monthly active users at the end of 2020. In addition, Razer operates a digital payments network.

Revenue came to $1.21 billion in 2020, up from $820.8 million the previous year. Peripherals account for 63.7% of sales, with a further 25.5% from hardware systems, and 10.6% from software and services. On a geographical basis, the Americas contribute 46%, with 24% from Europe, the Middle East, and Africa, 11.5% from China, and 18.5% from Asia Pacific ex-China.

The company swung from a net profit of $805,000 in 2019 to a net loss of $83.5 million in 2020.

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• Topics
• Greater China
• Technology
• Consumer
• Buyouts
• Hong Kong (China)
• Singapore
• TMT
• CVC Capital Partners
• manufacturing