Kakao Games acquires ~40% of social casino developer ME2ON at 3.2x the market price

South Korea-based mobile games developer and publisher Kakao Games (KOSDAQ: 293490) is acquiring 39.56% of South Korea-based social casino and casual games developer ME2ON (KOSDAQ: 201490) for $72.1m (KRW 98.0B) through two transactions its board approved on Sep 15. It is buying 7,011,390 existing shares, a 21.43% block, from founder and CEO Son Chang-wook and eight related parties at KRW 10,000 a share, $51.6m (KRW 70.1B) in total. ME2ON is also issuing 9,817,118 new shares at KRW 2,842 per share, totaling $20.5m (KRW 27.9B), of which KRW 19.2B funds working capital and KRW 8.7B repays debt. Together, the two transactions make Kakao Games the largest shareholder, with its own appointees replacing the board at closing. Both transactions settle on Nov 16, 2026, subject to Korea Fair Trade Commission clearance, and the new shares list on Dec 1.

 The KRW 10,000 paid to the sellers is 3.2x the KRW 3,110 at which ME2ON closed on Sep 14, a 221.5% control premium. At the block price, ME2ON’s equity is valued at $240.7m (KRW 327.2B) on a 100% basis, 2.7x FY2025 revenue of $85.1m (KRW 120.9B), and 26.0x EBIT (operating profit) of $8.9m (KRW 12.6B). The day before the announcement, the market valued the same equity at $74.9m (KRW 101.8B), 0.8x revenue and 8.1x EBIT. By comparison, Netmarble (KOSPI: 251270) paid $2.19B for social casino developer SpinX Games in 2021 at ~5.0x revenue, and Aristocrat (ASX: ALL) paid $990m for Big Fish Games in 2017 at 2.2x revenue and 11.9x adj. EBITDA.Founded in 2010 and listed on KOSDAQ in 2016, ME2ON develops the social casino apps Full House Casino, with more than 8 million App Store and Google Play downloads, Fulpot Poker, and Classic Vegas Casino, while its 45.1%-owned Ghost Studio (KOSDAQ: 950190) develops casual titles such as the card game TriPeaks Journey and the match-3 puzzle Match Miracle: Triple Match 3D. FY2025 revenue split: 61% games, $51.5m (KRW 73.3B), from ME2ON’s own social casino titles and the casual games of Ghost Studio; 31% talent management and drama production, $26.4m (KRW 37.5B), through Ghost Studio Entertainment; and 8% webtoon and web novel production and platforms, $7.1m (KRW 10.0B), through Bluepic and Metoon&Novel. North America accounted for 65% of games revenue in Q2’26. Revenue rose 28% in won terms in FY2025 after a 13% fall in FY2024, but EBIT fell every year from $30.1m (KRW 34.5B) in FY2021, a 31% margin, to $8.7m (KRW 11.8B) in FY2024, then recovered 7% in won terms to $8.9m (KRW 12.6B) in FY2025, a 10% margin. FY2025 marked the turn, continuing into H1’26: revenue of $35.2m (KRW 47.9B) with EBIT of $6.4m (KRW 8.7B), an 18% margin.This is the first acquisition under Kakao Games’ new owners. Japan’s LY Corporation took control in June through a ~$370m restructuring and appointed co-CEOs Kim Tae-hwan, formerly of Nexon (TSE: 3659) and LINE Games, and Lee Si-woo. Kakao Games’ FY2025 revenue fell 26% to $327.0m (KRW 465.0B) with an operating loss of $27.9m (KRW 39.6B), and Kim told investors in August that the company was reviewing more than 10 domestic and international targets, starting with deals in the tens of billions of won rather than the hundreds of billions. As Lee stated, “This acquisition marks the first step in executing a merger and acquisition strategy with proven business feasibility and profitability under our new leadership, and Kakao Games will continue to pursue M&A for its future.” It follows the Kakao Games-backed Align Studio’s purchase of the ArcheAge MMORPG IP from XL Games for $29.2m (KRW 39.2B) the week before. We will keep tracking Kakao Games’ deal activity: two acquisitions in two weeks under new owners make it a new buyer on the M&A scene, and it now sits on InvestGame’s Active Strategic Buyers list.