Candy Crush makers seek up to $7.6bn IPO valuation

Irish firm King Digital Entertainment, the maker of hit mobile phone game Candy Crush Saga, expects to be worth up to $7.6bn (€5.4bn) when it goes public this month as it looks to take advantage of strong demand for technology investments.

The successful IPO of Twitter in November and a surge in Facebook’s share price have fuelled speculation a string of technology firms could come to market, including music-sharing service Spotify, lodging service AirBnB, and payments company Square.

King should also get a boost in its US initial public offering from a surge in shares of digital coupon firm Coupons.com after it went public on Friday. Shares of Coupons. com doubled after being priced above the firm’s planned IPO range.

King Digital said it expected to price its IPO of 22.2m shares at between $21 and $24 per share. At the top of this range, the company would be valued at about $7.6bn.

The offering is scheduled to be priced on March 25 and the stock will start trading on March 26.

The Dublin-based firm will sell 15.5m shares in the offering, while stockholders, including Apax Ventures, will sell 6.7m shares, the company said yesterday in a filing with the US Securities and Exchange Commission.

King is hoping to benefit from a shift towards mobile platforms, social networks, and app stores. The company derived 73% of gross bookings from mobile users in the fourth quarter ended December 31.

In February, an average of 144m daily active users played the firms’s games more than 1.4 billion times per day, the filing showed.

The King IPO will raise as much as $532.8m at the top-end of the planned range.

Entities related to Apax will own 44.2% of the company following the offering, according to the IPO filing. CEO Riccardo Zacconi, who has led the firm since it was founded in 2003 in Sweden, will have a 9.5% stake.

Candy Crush Saga, which involves moving candies to make a line of three in the same colour, was the most downloaded free app of 2013 and the year’s top revenue-grossing app.

It has been downloaded more than 500m times since its launch in 2012. The basic games are free, but players must pay for add-ons or extra lives.

King offers 180 games in 14 languages through mobile phones, Facebook, and its own website, but is heavily reliant on Candy Crush, which brings in about three-quarters of its revenues.

The company said it has applied to list its shares on the New York Stock Exchange under the symbol “KING”.

JP Morgan, Credit Suisse, and Bank of America Merrill Lynch are lead underwriters for the public offering.

* Reuters