KOSDAQ-listed KineMaster has sent out teaser memos and contacted potential buyers, with strategic and financial investors at home and abroad showing interest.
Nomura Financial Investment, a sale manager for the South Korean mobile video editing service provider, has signed a non-disclosure agreement with potential domestic and foreign buyers.
Global social media platforms seeking synergies with the app and companies that are looking for new growth engine seem to be most interested in KineMaster. Numerous financial investors are also studying the firm after receiving teaser memorandum.
“The seller is being sensitive to information disclosure,” said an industry source, adding, “It seems the teaser memorandum includes some key indicators in addition to publicly disclosed information.”
KineMaster is reportedly seeking an enterprise value of around one trillion won ($900 million), but the company is concerned that its stock price is significantly lower than desired. KineMaster’s stock is hovering around 30,000 won after its mergers and acquisitions issue was raised at the 10,000 won level.
The firm’s market capitalization has recently risen to 4000 billion won, but the gap with its enterprise value of one trillion won is quite large considering KineMaster had net cash of 11.8 billion won at the end of September 2020.
“It can’t be said that the stock price perfectly reflects the enterprise value, but the seller is aware that its bargaining power may decrease if there is a large gap between its desired level (and the actual stock price),” said an industry source, adding, “The company is using a marketing strategy that strengthens the company’s attractiveness by highlighting its excellent technology and global recognition.”
KineMaster recorded revenue of 29.8 billion won in 2020, up 53.45% from a year ago, and its operating income and net income increased by 13 times and 40 times in the same period. Revenue from its mobile video editor app KineMaster, which generates 86% of the total revenue, increased by 81.73% from a year earlier.
Launched in 2013, the KineMaster app has 70 million monthly active users and 7.2 million daily active users. The app hit 340 million downloads worldwide, including users in the U.S., India, Indonesia, Brazil and Iraq. (Reporting by Byung-yoon Kim)