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Korea’s Netmarble Acquires Bulk of Kabam, Game Studio Backed by Warner Bros., MGM

Netmarble Games, a major mobile-game publisher based in South Korea, has agreed to acquire Kabam’s Vancouver-based studio, the developer of massively multiplayer, free-to-play games including the worldwide hit “Marvel Contest of Champions.”

Terms of the the deal, expected to close during the first quarter of 2017, were not disclosed. Kabam had received an unsolicited $800 million offer for its Canadian studio, VentureBeat reported earlier this fall. Netmarble is acquiring Kabam’s Vancouver studio along with some other U.S. operations; Kabam said it expects to sell off its three other studios — located in L.A., San Francisco and Beijing — after the Netmarble deal closes.

Kabam’s “Marvel Contest of Champions,” developed under a pact with Disney’s Marvel Entertainment, has grossed over $450 million since launching in December 2014 and has more than 90 million installs, according to the company. The Vancouver studio was formed out of Kabam’s 2013 acquisition of Exploding Barrel Games.

Investors in privately held Kabam included Alibaba Group, Google, MGM, Intel, Redpoint Ventures and Warner Bros. The company had raised about $245 million, including $120 million in funding from Alibaba in 2014 giving it a valuation of more than $1 billion.

Netmarble also is the largest shareholder of L.A.-based mobile games company Jam City, formerly known as SGN. In 2015, Netmarble invested $130 million in the company, and this year Jam City acquired TinyCo, the mobile games developer whose titles built around Hollywood franchises include “Marvel Avengers Academy” and “Family Guy: The Quest for Stuff.” Netmarble said there are no plans for now to merge Kabam and Jam City.

Upcoming Kabam Vancouver releases include “Transformers: Forged to Fight,” slated to bow worldwide in the second quarter of 2017, under a pact with Hasbro. That’s timed to hit around the release of Michael Bay’s “Transformers: The Last Knight,” set to premiere June 23, 2017, the first of three additional “Transformers” movies greenlit by Paramount Pictures.

Meanwhile, Kabam’s L.A. studio (which is not part of the Netmarble deal) is creating a multiplayer game based on James Cameron’s “Avatar” under a pact between Lightstorm Entertainment and 20th Century Fox.

Netmarble, in addition to the Kabam Vancouver studio group, also will acquire the company’s customer-support teams in Austin office and parts of the business development, marketing and user acquisition teams from Kabam San Francisco.

“We are thrilled to acquire Kabam’s Vancouver studio, which has proven itself as one of the best in game development, and business competitiveness in the western market including the U.S.,” Seungwon Lee, Netmarble’s chief global officer, said in a prepared statement. “We look forward to strengthening Netmarble’s business in the western market including the U.S. through this deal.”

Kevin Chou, CEO and co-founder of Kabam, said the company’s Vancouver studio “is joining a premiere organization that will continue its legacy of creativity and propel it to the next generation of game development.”

“We’re extremely proud of the work we accomplished with the Vancouver studio, and we know the team will continue their world-class work with Netmarble. No doubt they will continue to create amazing games for a global audience,” Chou said.

Netmarble, founded in 2000, has more than 3,000 employees. Netmarble has investments from and strategic partnerships with CJ E&M Corp., Korea’s largest entertainment company; Chinese internet giant Tencent; and Korean game developer NCsoft.

For Kabam, BofA Merrill Lynch is acting as financial adviser and O’Melveny & Myers is acting as legal adviser. Ropes & Gray LLP is acting as legal adviser to Netmarble.

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