[THE INVESTOR] After two years of preparation for an initial public offering, Kakao Games, the game unit of Korea’s mobile giant Kakao, has called it off, according to industry sources on Sept. 19.
The game company told Korea Exchange, the country’s stock market operator, that it is revoking the IPO process it launched in May. KRX had approved the preliminary screening for Kakao Games’ IPO on the second-tier KOSDAQ the following month as part of its fast-track screening for promising companies.
The game developer was reportedly aiming to list in the second half of this year, but has reconsidered its plans due to a delay in supervision by the Korean Institute of Certified Public Accountants, a mandatory process for an IPO.
The company also cited the deteriorating environment for game companies.
Kakao Games, whose value is estimated at 1.5 trillion won (US$1.40 billion) now, will focus on mergers and acquisitions. It is seeking firms with good intellectual property portfolio to boost its market value before mulling a public offering next year, a company official said.
The firm was founded in 2016 after merging with Daum Games. The following year, its net profit came to 55.7 billion won, making a turnaround from 1.8 billion won net loss. Its operating profit reached 32.3 billion won, jumping sixfold on-year.
“It might be better to list in the first half of next year as the company is set to see sound growth,” an industry source said.
Some said the value of the company could reach 2 trillion won once the company attempts an IPO next year if the game maker succeeds in M&As and planned publishing of new games.
By Park Ga-young (firstname.lastname@example.org)