‘Candy Crush’ Maker King Sets IPO Range at $21 to $24
King Digital Entertainment Plc (KING), maker of the popular smartphone game “Candy Crush Saga,” will seek as much as $24 a share in its initial public offering, potentially raising about $533 million.
King, whose owners include Apax Partners LLP and venture capital firm Index Ventures, will sell 22.2 million shares at a price of $21 to $24 a share, according to a filing today. The company, which plans to use the funds for working capital and acquisitions, has applied to list its shares on the New York Stock Exchange under the symbol KING.
“Candy Crush,” a puzzle game that features colored candies, made up 78 percent of cash spent by players at King last year. The top of the IPO pricing range would give the Dublin-based company, also maker of “Pet Rescue Saga,” an implied value of about $7.6 billion.
Demand for “Candy Crush” helped drive an elevenfold surge in revenue in 2013 to $1.9 billion. Profit jumped to $567.6 million from $7.8 million a year earlier.
The company generates revenue when users purchase virtual items, such as extra lives or additional game content, for about $1 apiece. The applications operate on smartphone devices of Apple Inc.’s iOS, Google Inc.’s Android and Amazon.com Inc.’s Kindle and on Facebook. In the fourth quarter, 73 percent of cash spent by users came from mobile, filings show.
Zynga Inc. (ZNGA), a pioneer in social gaming, has seen its shares slump 44 percent since a 2011 IPO, pushing down its market value to about $5 billion. Zynga’s “Farmville,” played on Facebook, faded in popularity as users defected to “Candy Crush.”
Net Proceeds
At the mid-point of $22.50 a share in the price range, the net proceeds would be $326 million after deducting underwriting discounts, commissions and expenses, according to King’s filing. The company also has an over-allotment option to sell 3.33 million shares.
Apax Partners, a London private equity firm, holds a 48.2 percent stake in King, while Index Ventures owns 8.3 percent, filings show. Co-founder and Chief Executive Officer Riccardo Zacconi owns 10.4 percent, and John Sebastian Knutsson, co-founder and chief creative officer, holds 5.9 percent.
Zacconi, 46, has been CEO since 2003 and previously served as an executive at uDate.com Ltd., an online dating service. He also held positions at Benchmark Capital Partners LP, a venture capital firm, and Boston Consulting Group Inc.
King will have 314.9 million shares outstanding after the offering, according to the statement.
Source: Bloomberg
