Can a gaming company built on the back of one gigantic hit be worth 80 percent of gaming titan Electronic Arts? Candy Crush maker King Digital thinks so.
King revealed in an SEC filing on Wednesday that it and its current shareholders are looking to raise a combined $532 million in its imminent IPO, which would value the Dublin, Ireland-based company at around $7.6 billion. At that valuation, King would be worth about four-fifths of Electronic Arts, which has a market cap of $9.3 billion, and 1.6x of one-time gaming darling Zynga.
King is selling 15.5 million shares in the offering, while its current shareholders are offering an additional 6.7 million shares. Each share is expected to be valued at between $21 and $24, meaning King could bring in as much as $372 million at the top end of the range.
The company, which also produces games like Pet Heroes Saga and Farm Heroes Saga, posted profits of $568 million in 2013 on revenue of $1.88
millionbillion. But its reliance on the success of Candy Crush — 78 percent of revenue came from the one game — is a potential problem, as is the fact revenue fell to $602 million in the fourth quarter from $621 million in the prior quarter.
Still, Candy Crush’s daily active user count rose from 93 million in December to 97 million in February, according to the new filing.
Upon completion of the IPO, private equity fund Apax will own 44.8 percent of outstanding shares, while Index Ventures will hold 7.8 percent.