Baidu seals $1.85b 91 Wireless acquisition
Baidu has finalized its acquisition of NetDragon Websoft's 91 Wireless, a Chinese mobile app store and game operator, for $1.85 billion.
NetDragon announced in July that it would sell its 57.4% stake in the company to Baidu for $1.09 billion, with Baidu buying the remaining shares, including those held by early VC backers, under the same terms.
Baidu is paying a total of $1.9 billion, including a one-time $52.06 million special dividend for 91 Wireless's existing shareholders, the company said.
Following the completion of the transaction, 91 Wireless will become a wholly-owned subsidiary of Baidu and will continue to operate under its existing management team. The deal is expected to close by the fourth-quarter this year.
"This acquisition reinforces Baidu's commitment to growing and fostering the developer community, establishes Baidu's position in the flourishing mobile game segment, and offers Baidu another strong channel to deliver its market-leading app offerings," said Robin Li, chairman and CEO of Baidu.
The company said Baidu and 91 Wireless users in China downloaded a combined daily average of 69 million apps last month, most of them directly to mobile phones.
According to AVCJ Research, IDG Capital Partners invested $9 million for a 13.71% stake in 91 Wireless in August 2011. Four months later, the company received $20 million from DT Capital Partners, Taiwan-based iD TechVentures and Vertex Venture, a wholly-owned subsidiary of Temasek Holdings.
Hong Kong telecom provider PCCW and David Wei, the former chief executive of Alibaba.com, are also said to be among the shareholders.
NetDragon subscribed to 4 million new preferred shares in 91 Wireless for $5 million last year, allowing the firm to increase its shareholding from 59.2% to 62.53%. As of June this year, NetDragon held 57%, while IDG owned 10.39%.
Established in 2007, 91 Wireless is one of the largest third-party app distribution platforms in China. It operates smartphone app stores 91 Assistant and HiMarket, community websites 91 Launcher and 91 Panda Reader, as well as other products for smart phone users.
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