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Jam City has raised $350 million in funding and has closed its purchase of mobile game publisher Ludia for $165 million.
The deal comes after Jam City scuttled its $1.2 billion plan to go public via a special purpose acquisition company (SPAC) because of changing conditions in the stock market. The $350 million consists of a combination of equity and debt financing.
Jam City CEO Chris DeWolfe said in an interview with GamesBeat that he was pleased with the outcome even though the company had to reset its original plans for acquiring Ludia from entertainment company Fremantle.
“We’ve had a very long standing relationship with Ludia, as well as their parent company, Fremantle, and both companies thought it was a great fit, which was very important,” DeWolfe said. “So we all hung in there. We began to develop our synergy plans over the time. The time definitely wasn’t wasted. We can hit the ground running now that it is fully closed.”
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Ludia has a portfolio of mobile games that includes the Jurassic World games (Jurassic World: The Game, Jurassic World Alive) and upcoming DC and Disney titles. DeWolfe said the AR tech behind games like Jurassic World: Alive could prove useful for the combined company.
“We had engaged in the route of partnering up with a SPAC to go public and acquire Ludia with the a transaction that started probably close to a year ago with the notion that it was going to be very quick and allow us to make the acquisition as part of the fundraise,” DeWolfe said. “At the time, it was the best way until it wasn’t, and, so, as a company, you always have to choose the best capital structure that meets your needs.”
The money comes from Netmarble, Kabam, and affiliates of funds managed by Fortress Investment Group. The financing round is Jam City’s largest to date. Netmarble, the South Korea-based game company and maker of Marvel: Future Revolution, retains majority ownership of Jam City. But DeWolfe said Jam City operates independently, has a separate board, and has its own strategic goals.
Jam City has generated more than $3 billion in lifetime bookings and 1.3 billion cumulative installs to date, in aggregate including Ludia. Prior to the Ludia acquisition, Jam City achieved double-digit compound annual growth in both bookings and profitability on an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) basis for the past five years through 2020.
Netmarble, one of the largest and most successful mobile gaming companies in the world, previously led a $130 million equity investment in Jam City in 2015. In 2019, Jam City raised $145 million in strategic financing led by a bank syndicate including Joint Lead Arrangers JPMorgan and Bank of America Merrill Lynch with Silicon Valley Bank, Truist Securities and CIT Bank.
Jam City will use proceeds from the financing to help further its strategy to build out its portfolio of games through both organic growth and acquisitions, DeWolfe said. He said the funds raised today will help the company continue with both possibilities.
“There are a lot of great opportunities out there,” DeWolfe said.
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Jam City has more than 850 employees in studios located in Los Angeles, Burbank, Cedar Falls, Las Vegas, San Diego, San Francisco and, internationally, in Berlin, Bogotá, Buenos Aires, and Toronto. Ludia has more than 400 employees and is based in Montreal.
As for the stock market, DeWolfe said that the public markets have slowed down when it comes to game companies going public. The SPACs are receiving more scrutiny, and the market was crowded.
“It became harder to tell our story in this environment because there were so many SPACs that hit the market at the same time,” he said. “It took longer and began to diverse from what our goals were, and the market got a lot more choppy at the same time.”
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