China's iDreamSky agrees PE-backed take-private
Chinese mobile game publisher iDreamSky Technology has agreed to be taken private by its chairman and a string of venture capital investors. The company listed on NASDAQ in August 2014.
The company has accepted an offer from Michael Chen, its chairman and CEO, of $14.00 per share for all outstanding American Depository Shares (ADS). The terms, which value the company at $609 million, are the same as those in Chen's initial bid, submitted in June of last year. It represented a slight deficit to the previous closing price, although the stock gained 25% in the days ahead of the announcement.
His bid is being supported by V Capital, Prometheus Capital, Legend Capital, We Capital, and StarVC, among others, according to a filing. The deal will be financed by a combination of rollover equity from existing investors, fresh equity from certain consortium members, and $161 million in debt financing arranged by Shanghai Pudong Development Bank.
Prometheus Capital is a PE fund set up by the son of Jianlin Wang, chairman of Wanda Group, while StarVC was founded by actor-turned-angel-investor Xiaoming Huang and fellow performers Bingbing Li and actor Quan Ren.
As of December 2014, Chen held a 22.1% stake in iDreamSky but his voting power was nearly twice that as a result of the dual-shareholding structure. Legend Capital and Redpoint Ventures had 15.5% and 12.6%, respectively, while Prometheus held a smaller stake.
The company received initial funding from Legend Holdings' Legend Star Incubator program in 2011. The following year, affiliates of Legend Star, plus Legend Capital and Redpoint, contributed $6.9 million in Series B funding. A Series C round worth around $9 million came the following year, provided by Legend Capital and Redpoint. The company raised $116 million in its IPO in August of 2014.
Shenzhen-based iDreamSky was founded in 2009, and claims to be the largest third-party mobile game publishing platform in China, based on the number of active users in 2014, with a market share of 26.5%. In the fourth quarter of last year, it had 110.6 million monthly active users. The company generated 113.5 million game downloads and activations in 2014, up 16.2% year-on-year.
Revenue came to RMB984.1 million ($158.5 million) last year, compared to RMB244.8 million in 2013. However, rising administrative and marketing costs saw the company slip from a RMB27.8 million net profit to a RMB16.7 million net loss.
More on Technology
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.