Australian mobile gaming firm iCandy Interactive Limited (iCandy) announced Tuesday that it is acquiring 51 percent stake in Southeast Asia-based games development, publishing and licensing company Digital Games International Pte. Ltd. (Storms) for A$8 million ($5.69 million). The deal will be settled via the issuance of new fully paid ordinary shares of iCandy.

The acquisition of Storms will allow iCandy to leverage its distribution network to further target a number of markets in Asia Pacific, iCandy said in a statement.

Storms was founded in March 2020 by Singtel, Advanced Info Service (AIS), and SK Telecom. Singtel, AIS and SK Telecom are the largest mobile network operators in Singapore, Thailand and South Korea, respectively.

In addition to the initial transaction for 51 percent of Storms, the existing shareholders of Storms will also have a put option to sell the remaining 49 percent of Storms to iCandy, which will be similarly settled via the issuance of new shares of iCandy.

Storms develops and publishes casual and hyper-casual games through the Google Play and Apple App Stores and taps into its business-to-business (B2B) business model which leverages super apps and telcos product offerings. It also develops its own instant gaming and gamification features.

The company demonstrated stellar performance in its financial period ending 31 December 2021, with approximate revenues of S$4.1 million ($3.05 million). This represents a surge of 14 times from its financial year 2020 reported revenues. Storms has a healthy balance sheet position with approximately S$7.2 million ($5.35 million) of cash and cash equivalents.

The management team of Storms, as well as Singtel, AIS and SK Telecom, are of the view that the share swap with iCandy will allow Storms to collaborate and advance iCandy’s goal of developing the gaming metaverse.

“We are looking forward to partnering with iCandy Interactive as iCandy develops its metaverse gaming ambition. This will further our collective strategy to better serve our respective customers with unique and engaging content,” said Lim Cheng Cheng, Singtel’s Group Chief Corporate Officer and Chairman of Storms’ Board.

Meanwhile, SK Telecom Vice President and Head of Global Business Development Jae Shin Lee said that iCandy with its game studios and development expertise makes a great complementary addition to Storms, which is a mobile game publisher and has expansive distribution advantages via strategic telcos and other partnerships in the region.

“Together, they will be well positioned to create and publish games for the metaverse and Web 3.0, as well as to bring Korean games into the Southeast Asian market,” he said.

Storms Chief Executive Officer David Yin also said that he recognized many synergies between Storms and iCandy, with Storms making a great complementary addition to iCandy’s horizontally-integrated gaming business model.

“At the same time, this acquisition strengthens Storms’ ability to be a trailblazer in delivering more fun to the gaming community through efficient game development time and at scale,” he said.

Post-acquisition, iCandy’s board believes that the company will be in a better position to extend the reach of its portfolio of projects through leveraging Storms’ expansive games publishing network in the fastest growing market for gaming experiences.

The company views the acquisition of Storms as an attractive opportunity to further build shareholder value.

It said the acquisition of Storms will allow iCandy to realise potential business synergies between both companies, due to its ability to enhance iCandy’s game development and publishing capabilities.

It also said the acquisition of Storms will deliver synergetic benefits to iCandy, especially post acquisition of Lemon Sky Studios since both companies will distinctly augment iCandy’s business processes along different parts of its game production flow. The acquisition can also be seen as complementary to the core business of Lemon Sky Studios.

The company also views the access to Storms’ extensive network of telcos and super apps as a key benefit of the acquisition.

With the ability to leverage Storms’ network on the games publishing front, iCandy said it can improve its monetization mechanisms.

Storms’ competencies and partnerships with large telcos will allow iCandy to deliver Web 3.0 gaming to its large tech-savvy audiences, bringing the company closer to its goal of developing and publishing games for the metaverse, it added.

ICandy is an Australian publicly-traded company that has its core business in the development and publishing of mobile games and digital entertainment for a global audience. The company runs a portfolio of mobile games that have been played by over 360 million mobile gamers worldwide.

ICandy is founded and backed by Fatfish Group Ltd, which holds a significant stake of 192.5 million shares in iCandy through its subsidiaries. Other significant shareholders of iCandy include Animoca Brands, a global leader in metaverse gaming recently valued at over $5 billion.

The completion of the acquisition is expected to occur on or before February 28, 2022.

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