TOKYO/HELSINKI/SAN FRANCISCO: Japanese tech and telecoms group SoftBank Corp is paying 150 billion yen (RM4.85 billion) for a 51 per cent stake in Finnish mobile game maker Supercell, valuing the small maker of hit games "Clash of Clans" and "Hay Day" at US$3 billion (RM9.5 billion).
Softbank's bid to claim a leading role in the fast-growing mobile games market makes three-year-old Supercell, with about 100 employees and just two free-to-play games, more valuable than Zynga Inc, the US$2.8 billion company behind former hits such as "FarmVille."
Twenty per cent of Softbank's investment will come from its mobile games maker subsidiary, GungHo Online Entertainment Inc, which has a market capitalisation of about US$8.3 billion.
Softbank's offer values Supercell, with daily revenue of about US$2.4 million mainly through the sale of in-game, virtual items, at about 3.5 times projected annual sales. That is cheaper than several major recent deals such as Electronic Arts' acquisition of PopCap in 2011, which went through at about 10 to 11 times sales the year before.
Market researcher Newzoo estimates global game revenues across all platforms will reach US$86.1 billion by 2016 as the number of gamers reaches 1.55 billion. It expects the fastest growth to come from mobile gaming, which will make up almost 30 per cent of the total, up from about 17 per cent this year.
The deal shows SoftBank chief executive Masayoshi Son's appetite for foreign merger and acquisition has not dimmed since his US$21.6 billion acquisition of United States mobile carrier Sprint Corp this year.
He was quoted on Supercell's blog as saying the acquisition was part of its "quest to become the No. 1 mobile Internet company", showing his ambition to expand further beyond its main wireless and Internet services business.
SoftBank has the third largest market capitalisation in Japan and is set for a major windfall as Alibaba, China's top online retailer in which it owns a 36.7 per cent stake, is preparing for a stock market listing.
Meanwhile, SoftBank is also in talks to buy a stake in US wireless device distributor Brightstar Corp that media reported could be worth more than US$1 billion and boost its bargaining power with hardware suppliers.
A report by the Nikkei business daily said the Japanese tech and telecoms group was in the final stages of talks to buy up to 70 per cent stake in Brightstar in a deal worth more than 100 billion yen.
SoftBank said in a statement: "We are in discussions on this matter but at this time, we have not made any decision yet." Reuters