Supercell, the Finnish maker of highly popular game Clash of Clans, is nearing a deal to be sold to China’s Tencent, an acquisition that would value the company at over $9 billion, reports the Wall Street Journal:
Tencent Holdings Ltd. is nearing a deal to buy the Finnish maker of the popular “Clash of Clans” game in a deal that values the company at more than $9 billion, said people familiar with the matter
According to unnamed sources, Japan’s SoftBank, which owns a majority stake in Supercell, is in “late-stage talks” to sell their stake to Tencent.
Those familiar with discussions are saying the deal would put Supercell’s valuation at over $9 billion, a whopping 70% jump compared to a year ago, and would be Tencent’s largest deal to date, with an agreement possibly announced next week, pending any financial hurdles.
SoftBank has over $80 billion in net debt and the sale of its Supercell stake would help its balance sheet; roughly one-third of its debt is tied to its struggling U.S. carrier Sprint. Sources say Supercell was valued at about $5.25 billion last year. SoftBank acquired a 51% stake in Supercell back in 2013, for $1.53 billion, while last year increased its stake to 73%.
Sources say any deal for Supercell would mean buyers would have to agree to terms to ensure the mobile company’s founders remain in control, and not have the ability to force an IPO or remove existing management.
With offices in Finland, San Francisco, Tokyo, Seoul and Beijing and staff of 180, Supercell earned $779.1 million last year on revenue of $2.11 billion euros, from its four games, where revenues derive from in-app purchases: Clash of Clans, Hay Day, Boom Beach and Clash Royale.
Supercell makes its games nearly impossible to finish, as new levels and upgrades are continuously released, as their major hit Clash of Clans still keeps players addicted, nearly four years after its release, which is impressive for a mobile game (for those asking, we’re in the late stages of TH9).