First M&A move under new ownership targets profitable global social casino operator

Logos of Kakao Games and ME2ON (Kakao Games)
Logos of Kakao Games and ME2ON (Kakao Games)

Kakao Games is acquiring management control of social casino game developer ME2ON for 98 billion won ($72 million), making its first major acquisition under a new ownership structure as it seeks steadier earnings and greater global reach.

According to Kakao Games on Tuesday, its board approved the acquisition of a 39.56 percent stake in ME2ON for approximately 98 billion won ($72 million). The deal will make Kakao Games ME2ON0's largest shareholder, securing management control of the company.

The acquisition marks the first deal targeting a company with proven business performance and profitability since Kakao Games reorganized its management structure in March, when it announced that LAAA Investment, a private equity fund established by Japan's LY Corp., was to become its biggest shareholder, overtaking Kakao.

Through the deal, Kakao Games plans to secure new development and service pipelines spanning social casino, casual gaming and mind sports. The move is aimed at diversifying its game portfolio while building a more stable earnings base through ME2ON's established financial structure.

Kakao Games said the acquisition would support its efforts to pursue a medium- to long-term turnaround by combining its own capabilities with ME2ON’s existing business operations and overseas market reach.

Founded in 2010, ME2ON operates social casino and casual game businesses. Its portfolio includes titles developed and serviced for markets across Asia, North America and Europe. The company was listed on Korea's secondary tech-heavy bourse Kosdaq in 2016.

ME2ON logged approximately 120.9 billion won in sales and 12.6 billion won in operating profit last year. Overseas sales accounted for more than 80 percent of its total revenue, highlighting the company's performance across international gaming markets.

Beyond gaming, ME2ON has pursued diversification into other content sectors, including dramas, webtoons and web novels.

"As this acquisition is the first step in implementing an M&A strategy focused on companies with proven business performance and profitability under our new management structure, we will continue pursuing M&A opportunities for the future of Kakao Games," said Lee Si-woo, co-CEO of Kakao Games.

"We will seek synergies in several areas, including expansion into the diverse intellectual property content sectors owned by ME2ON and joint development projects with game studios in China."


hwkan@heraldcorp.com