Crazy game mergers and acquisitions: More than a A-share culture media company intends to acquire

The buyers and sellers of the phone calls, financial advisor (FA) Li Ming (alias) has clearly felt that this year's game mergers and acquisitions market is fast from the seller's market into a buyer's markets, and the most popular buyers are from a a-share culture media companies. "Game companies are like fruits, they need to be sold at the best of times and out of date." Giacometti, the investment manager of the venture capital. Earlier, his company has invested in Seventh Avenue and Guangzhou Goode and other well-known gaming companies, and in the Seventh Avenue sold to Sohu tour of the transaction benefited a lot. "Gaming companies are now looking for an independent listing, which is why most VC companies are willing to play games," he said. "The vice-president of a well-known U.S. VC told reporters that he had invested in too many mobile gaming companies before, but the doors of these game companies in the U.S. and a-share listings were closed, compared with the listed companies that turned to a shares to become the majority of game companies to opt out. Reporter learned that more than a a-share of cultural media listed companies are in intensive contact with the appropriate game team acquisition. "A better game company has recently received several listed companies," he said. "A person familiar with the matter said. Huayi Brothers (300027) recently announced a suspension of business, and announced that there will be major mergers and acquisitions, the market is widely spread, Huayi is preparing to buy a game company. and Palm Technology (300315) in charge of investment and acquisition of Vice President Hejia, said the company in the acquisition of the network pioneer is looking for a new game company acquisition target. In addition, there are a number of cultural media listed companies are quietly looking for game company mergers and acquisitions. With the rapid outbreak of the mobile gaming market this year, the market suddenly out of a large number of millions of running water game company, can be acquired by the target of a sudden increase, and the ability to buy in the market a a-share culture media company number of a few, game company mergers and acquisitions market has quickly changed from a seller's market into a buyer's markets. Why does a shares favor games? A few months ago, the shares listed shortly after the game company's Palm Technology announced the suspension, and soon announced a 810 million yuan to buy the web game company mobile network pioneer. After the palm of the card after the technology rally fierce, even pull a number of trading, the stock price all the way from the suspension of more than 20 blocks up to the highest when more than 30 pieces. At that time, there have been hundreds of organizations to the palm of the fun of scientific and technological research, its popularity of the market can be seen. Hejia recalls that the market capitalisation of the acquisition was about 3 billion, and many in the network team thought that as a newly listed company, its performance and strategy needed time to observe and verify, and there was some concern about choosing a large number of stocks to hold the palm. At that time, the pioneer team tried to take some of the interest in the stock. After the completion of the merger, Palm Technology shares soared. "Then every time I go to Guangzhou (moving network pioneer) There, they are filled with happy smile, regret not to take some stock." "Hejia said. Hejia said the company has invested five or six projects since this year, including game developers and issuers, and has also considered taking stakes in a number of game-platform vendors, whichStaying is very good. He says Palm technology is still looking for new acquisitions. "The market has given us such a good opportunity, mobile phone game of the plate up so fast, game companies have to withdraw the demand, we certainly will not only buy one on the end, the continued investment and acquisition is an interesting endogenous extension of the growth of an important component, but also in line with the development of the game industry law. "Hejia said. The price of palm-tech shares soared, largely because of the prospect of new mergers and acquisitions in the future. Hejia has been playing mobile phone games since he served in the air network, and has more than 10 years of experience. "Our mergers and acquisitions have always focused on the team, not just the products and profits, the most important thing is to make the fun and the company produced synergies, complementarity, resource integration." "Hejia points out. Before the palm of the technology, more shocked the market is the Zhejiang newspaper media to spend 3.2 billion of the Grand winger's acquisition. As the original paper media business market prospects are not optimistic, so through the merger and acquisition of game companies to become the group's established strategy. At the time, it was shocking that the winger valued as much as 20 times, while the US capital market valued gaming companies at 6-8-fold, and the winger's previous parent company's Shanda Network eventually announced a retreat because it had long had no investor endorsement in the US market. Today, a shares of the cultural media sector has increasingly relied on mergers and acquisitions to do large-scale, rather than rely on the company endogenous power. A fickle game company a vice president of a well-known American VC who invests in too many game companies, said the game company sold to a-share listed companies, is a winning thing. He said U.S. capital markets are now largely no longer receptive to Chinese gaming stocks. The shares of companies that are currently listed in the United States, the Nineth City, the perfect world and so on are very depressed, and many companies have a single-digit PE (P/E ratio), and even the cash reserves have surpassed market capitalisation, indicating that American investors are less interested in China's game concept stocks. The vice president of the U.S. VC pointed out that the current game companies in the United States listing has an unwritten threshold, that is, the annual profit reached 50 million U.S. dollars-whether it is the domestic web game companies or mobile gaming companies, to achieve this conditions are very few companies. At the same time, game companies to the A-share listing of the door is also gradually closed. Executives at a a-share listed company say that 5 companies currently lining up in a a-share market, 4 of which are likely to end the listing, partly because of falling performance during the IPO wait, partly because some conditions are not up to the demand for a-share listing. Many of the provisions of the current a-share IPO are detrimental to gaming companies. The first is the question of income recognition. There are many kinds of revenue for game companies, such as selling props and selling game coins. The Internal audit department does not stipulate which revenue recognition is valid. In the case of Palm technology, the company was not the dominant game concept at the time of the CSRC's review, but was adopted by the SP concept-the advantage of China MobileSuch state-owned enterprises to endorse the endorsement of income recognition, and ultimately help the palm of the technology smooth listing. And most of the game concept of the company, the A-share waiting to be listed in the process have been the cold shoulder. In addition, the domestic a-share IPO is waiting for a long time, which makes the game company's listing is fraught with risks, because the performance of the game company is very volatile. Maybe a game company did a good job in the SEC's filing, but it started to slide at the time of the trial. In the era of mobile gaming, the life cycle of the game began to shorten dramatically, the market competition is unprecedented intense, this kind of uncertainty is magnified. In this case, most game companies have to choose to sell a-share listed companies. Domestic listed companies are now willing to buy high profit companies, especially the cultural media sector. And the game is the most matching one. First, China is the game as a cultural and creative industry to see, and the current cultural media plate is a a-share market, one of the hottest investment. And in the cultural media industry, the most profitable is the game. The domestic game company acquired PE is far below the game company Independent in a shares listed PE, but is far higher than the listed overseas. Therefore, whether for the game company or for investment in the game company's VC, sold to a-share listed companies are very good choice. For example, a A-share listed company's PE is 40 times times, it is willing to 15 times times PE to buy a game company, and the game company's own independent to go overseas listing, but also only 8 times times PE, then of course it is willing to sell a a-share company. "said the vice president of a well-known U.S. VC. How can a game company win? A-share of mobile gaming company's mergers and acquisitions by the Bo Rui spread Shanghai morning inflammation began. At that time, Apple announced the mobile gaming company's revenue rankings, unknown Shanghai morning inflammation ranked in the top 10, a time in the country caused a sharp response. Bo Rui spread with Shanghai morning inflammation signed the "Equity transfer Agreement" on December 23, 2010, to invest not more than 40 million U.S. dollars to acquire Shanghai morning inflammation 100% stake. In a previous announcement, Bo Rui spread said that Shanghai morning inflammation in the App Store (Apple application Shop) has a high reputation, and said that a very few can compete with the established European and American game companies. Bo Rui spread also became a a-share market at that time the only "Apple Game concept stock", and once ushered in a small wave of shares pulled up. At that time, the buyers and sellers signed a gambling agreement, to get 40 million dollars, morning inflammation must be in 2011-2013 respectively to Bo to contribute 4 million U.S. dollars, 5.8 million U.S. dollars and 8.12 million U.S. dollars of profits, annual growth rate of more than 40%. But the deal soon ended. Bo Rui spread after the announcement that, because the transfer of equity transfers failed to get the relevant departments to review the approval, the seller believes that the approval of the work required to approve the time and ultimately the adoption of uncertainty, as well as the market changes resulting in the completion of the Shanghai morning inflammation of the agreement agreed on the performance of the The company decided to terminate the takeover of ShanghaiMorning inflammation equity matters. Schweiliang, founder of Shanghai Morning, told reporters that the reason to consider selling, but also because of the whole mobile phone game in the future there is a lot of uncertainty. At this time, Bo Rui spread just interested in buying, give a high degree of freedom, so decided to sell the company. As for why the subsequent termination of the deal with Bo Rui, Schwei Light said there is a deal with the Bo and so can not disclose too much. But it can be imagined that the suspension of the merger behind must hide a lot of stories. Schweiliang points out that the game team that chooses to sell must be clear about what they want to have a good result. Because most gaming companies are not short of money, money is not the most important. "If you sell, then you give up the choice, a person can choose the path of life, more important than money is the right to choose." "Schwei said. Schweiliang pointed out that the seller had to think more than the buyer when considering the sale, because the rules of the capital market are in fact unchanged for more than 10 years, nothing more than to ask you to achieve how much profit performance, and the game team sellers have to consider a lot of things, such as the sale and listed companies how to cooperate, is to do with them, Or take the money to go, you have to think about it, so that will not happen after the transaction problems. "If the game company is not happy when it is sold, I think the seller usually has to take a bigger responsibility because it is not thinking clearly before the sale." Schwei Liang concludes. "Game companies are the last to sell, game companies like fruit, expired." "Giacometti said. Most gaming companies have the mindset to sell at the best time of their own ascent. Because game companies want to go public, at least two successful games to prove themselves, and most of the game companies did not wait until two game success began to decline. Most gaming companies are not particularly big on revenue, but the sustainability of income is problematic. Games and movies are more similar industries, the success of a game, does not represent the future of the game will be successful, so the capital market to the game company's valuation has been relatively low. In the first listing of a A-share of the game company (300052), for example, 2012 net profit fell 10%, 2011 net profit fell more than 30%, game company performance volatility so that a a-share investors have a further understanding of it. Giacometti's company invested in game company Seventh Avenue, which was sold at a higher price to the Sohu tour. At that time, the team on Seventh Avenue first set up 20% of cash and entered into a 3-year performance betting agreement, agreeing that 3 years later the founding team could all quit-which is actually betting that future games will continue to succeed. Fortunately, after the acquisition of Seventh Avenue after the launch of the follow-up game has also been successful, the final buyer and seller happy. When acquiring a purchaser, it is usually necessary to enter into an agreement with the founding team of the game company to require a full period of time to leave. For example, the founder of Seventh Avenue, Cao Kai, signed a 3-year lock-up agreement with the new company, and after a few years of acquisition, announcedCloth to leave. "When a game company is bought and purchased, it will typically require a start-up team to stay for another 3 years." But then the general game company does well, and no one goes. "Giacometti points out. And gaming companies are selling, in many cases out of pressure from investors. By contrast, there is no need to sell the game companies that have never been financed, because after the sale, the founding team will often have such a lack of freedom, especially for sale to a a A-share company which had not understood the game before, it is easy to have many running-in problems after being acquired. The most representative of the games companies that have not been financed without a sale is the Shanghai games-the company's monthly income is alleged to be billions, have repeatedly rejected the investment requests of the gale, because investors give the money is equal to its income for several months, the game company when cash flow is good, financing has no meaning. In the absence of investor pressure, companies can spend most of their income on employee incentives to develop better follow-on products.