This article was published on March 25, 2021 at 10:35 The Bell Paid PageThis is the article expressed in the article.
KT will incorporate the e-sports team KT Rollster through the spin-off and at the same time promote the work to attract investment from outside. It is interpreted as a movement based on the expectation that the value of the club will also increase as e-sports become popular.
According to the investment banking (IB) industry on the 25th, KT has selected Samjung KPMG as the lead company and is promoting investment attraction of KT Rollster. In this regard, preliminary bidding was recently conducted, and it is believed that multiple strategic investors (SI) and financial investors (FI) participated.
KT operates sports and leisure-related service businesses through KT Sports, a wholly-owned subsidiary. KT Rollster is an e-sports club within KT Sports and participates in the’League Of Legends (LOL)’, a multiplayer online battle arena (MOBA) game.
In connection with this investment attraction, KT will also promote the division of KT Rollster within KT Sports. In the market, KT Sports is putting more weight on the possibility of a division in which KT directly owns KT Rolster, rather than the physical division in which KT Sports has a stake in KT Rollster.
KT’s spin-off and investment attraction of KT Rollster is read as a move to respond to the expansion of the e-sports market. According to the game industry, the global e-sports market has grown by an annual average of 13% over the past five years. The scale of the domestic e-sports market is estimated to have grown from 70 billion won in 2015 to 130 billion won in 2019. As game users and viewers increase, a virtuous cycle structure is being formed in which advertisement income, broadcasting fees, and prize money are expanding, according to an official in the game industry. Considering the expansion trend of the e-sports market, KT can add another solid subsidiary.
An official from the Korea Creative Content Agency said, “Especially in China and North America, e-sports are expanding rapidly. In the case of China, where the LOL Professional League is gradually growing, local LOL-only stadiums are being established based on a culture of regional ties, and marketing and “There is a huge investment going on in sponsors,” he said.
In connection with the incorporation of KT Rollster, interest is focused on valuation. KT calculated the ransom price of KT Rollster using the share price-to-sales ratio (PSR) method, and it seems that it held 70 billion won as the equity value of KT Rollster’s 100% stake. In the case of KT Rollster’s sales, it is believed that most of the revenues from broadcasting rights, competition prizes, and sponsors of the parent company accounted for the majority.
The scale of this capital expansion is around 35 billion won. Assuming that human division and investment attraction will take place, KT will hold two-thirds of KT Rollster’s stake, and new investors will hold the remaining stake.
An official from the IB industry said, “In the case of e-sports, it is possible to expand into a business that converts games and practice videos of famous players into contents, and it is possible to sufficiently promote business synergy with PCs, smartphones, and intellectual property rights (IP).” Said. This official added, “It seems that the original buyers who participated in this preliminary bidding were friendly and participated in the possibility of business diversification and enhancement of corporate value due to the expansion of e-sports.”
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