Krafton Hires Banks For IPO
|Chang Byung-gyu, Founder and CEO, Krafton.
Photo credit: Official page of the Republic of Korea, licensed under CC BY-NC-SA 2.0
Krafton, the South Korean gaming company behind hit game PUBG, has said it has hired Korean investment bank Mirae Asset Daewoo to lead a public offering that’s planned for next year. Along with Mirae, Krafton has also hired foreign banks Credit Suisse, JPMorgan Chase, and Citigroup to help arrange a public offering that could mark South Korea’s largest-ever such offering.
According to local media reports, Krafton could sell up to $9 billion in stock in its IPO and could see a valuation hitting about $26 billion, based on the public trading multiples for fellow Korean gaming companies Netmarble and NCSoft. Before now, the largest IPO in South Korea was the $6 billion debut of telecoms giant KT Corp back in 1998.
Krafton, backed by strong revenue from its hit title PUBG, has long been considered as an IPO candidate. Now as a private company, it’s backed by investors including Chinese gaming giant Tencent which held a 13.2% stake as of June 30, as indicated by a regulatory filing. Tencent is known to have invested more than $500 million in Krafton in 2018.
For reference, Krafton posted $1.4 billion in revenue and over $240 million in net profit last year. It’s one of the biggest and most profitable gaming companies globally and is apparently on the path towards an IPO that could see it become one of the most valuable.
The investor appetite for Korean gaming companies seems to be high, signaled by the last month public offering of another Korean gaming company, Kakao Games, that saw its value more than triple in its first two days of trading.