Russian media mogul Ivan Tavrin, who has a long history of buying up telecom and internet companies, is getting into the mobile gaming space with a $1.9 billion SPAC deal. 

Tavrin launched blank-check company Kismet Acquisition One back in August of 2020 with the goal of acquiring a promising player in the digital space. He decided on Nexters, the Cyprus-based developer behind the popular role-playing game Hero Wars, in part at least because the U.S. market for SPAC deals was quickly getting crowded. 

"The reason why we raised the SPAC is because we wanted to look at opportunities, not in the U.S. but in Europe, because we can clearly see that SPAC competition in the U.S. is getting hotter and hotter," Tavrin told Cheddar. "There are more and more very qualified sponsors

looking for companies." 

He said the deal environment is creating a market that favors companies over buyers, where prospects get to pick and choose who buys them. 

"If you look at the fact that now there are hundreds of SPACs looking for business combinations, there's probably more product than demand," Tavrin said. 

As a Europe-based company with a global, borderless customer base, Nexters was a compelling option for the new SPAC. 

A Reason to Go Public 

For Nexters, going public was a vague long-term goal, but it was unclear at first how it would benefit a company that had already grown tenfold in the past two years. 

"An IPO is a kind of [light at the end tunnel] for any business that has emerged from people with Russian roots, but we never thought of a reason to go public," said Anton Reinhold, chief business development officer for Nexters. 

The new capital won't be propping up Nexter's basic operations. Instead it will be funneled into an aggressive M&A strategy. Reinhold said he couldn't name names given the competitiveness in the mobile gaming space, but that multiple companies had already lined up. 

"Look, the company doesn't need cash, so there is no plan to use this for organic growth," Tavrin said of Nexter's business model, which relies on in-app purchases for much of its revenue. "The main purpose of the capital will be to acquire companies." 

M&A Boom

M&A activity in the mobile video game space is already booming. Investment was up 77 percent in 2020 from 2019, according to a report from industry-tracker Digital Development Management. 

"You probably see a good deal in gaming every week," Tavrin said. 

Reinhold emphasized, however, that developing its existing titles remains an essential part of its business. Hero Wars, for instance, has retained players for years, he said, by constantly providing new content. 

"The market for RPGs is super sticky," he said.

Share:
More In Business
Boeing defense workers on strike in the Midwest turn down latest offer
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
FBI’s NBA probe puts sports betting businesses in the spotlight
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
Tesla’s profit fell in third quarter even as sales rose
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
Load More