Quepasa to acquire Brazilian Social Game Development Studio for $4 million

February 4, 2011 — Fusion DigiNet

Quepasa Corporation, creator and operator of Quepasa.com, the online social network for the Latino community, is to acquire XtFt Games S/S Ltda (XtFt), the owner of substantially all the assets of TechFront Desenvolvimento de Software S/S Ltda (TechFront), a social game development studio based in Curitiba, Brazil.

Quepasa will acquire XtFt for net consideration of approximately $4 million, comprised of $3.7 million in shares of Quepasa common stock (as determined by Quepasa’s average closing price over a 10-day period) and a $300,000 brokerage fee. XtFt’s key partners have also been offered option-based retention packages. The transaction will close upon the delivery of all outstanding items outlined in the agreement.

Founded in 2006 as a developer of multiplatform console, Web and mobile games, TechFront began developing social games for the Orkut platform in 2010 in partnership with various international publishers, including U.S.-based eGames.

The acquisition of XtFt will allow its team of 41 full-time game developers to focus on developing culturally relevant social gaming IP for the Quepasa platform and other social networks with audiences in Latin America. The acquisition will also better position Quepasa to capitalize, as both a publisher of social games and a platform for playing social games, on the rapid growth and monetization of social games throughout Latin America.

Quepasa recently reported that its membership base increased 255% in 2010 to total more than 27.2 million registered users. The site added 2.2 million users and generated 16.4 million unique visits in December 2010, compared to 1.2 million new users and 7.1 million unique visits in December 2009. Page views increased to 184 million page views in December 2010 from 175 million in the previous month.

Brazil, Curitiba  & USA, West Palm Beach, FL

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US entertainment and media M&A activity has outpaced the overall US deal market in 2010

January 31, 2011 — Fusion DigiNet
  • Content developers remain attractive investments
  • Expect increased activity in video games and social media sectors ample cash available to fuel future M&A

US entertainment and media (E&M) merger and acquisition activity outpaced the overall US deal market in 2010, according to PwC US. With the industry’s fast-paced shift to digital – and attractive levels of corporate cash reserves and private equity dry powder, PwC believes the catalysts are in place for more E&M deal activity during 2011.

In 2010, completed E&M deal volume increased slightly by 3% to 804 transactions, while total completed and disclosed deal value fell from $37.2 billion in 2009 to $33.5 billion in 2010. A primary driver of the increase in deal volume was Internet software & services (B2C) deals. PwC notes an increase in the percentage of announced transactions that did not disclose value, which could have an impact on the actual 2010 value trends. However, despite the decrease in announced deal value, the pipeline for E&M deals in 2011 points to continued improvement and a strong outlook, with more than 200 deals and $24 billion of deal value already announced and pending (including the recently approved NBC Universal joint venture between Comcast and GE).

Total entertainment & media deals by sector

Corporate deal activity remained at the forefront in 2010 with strategic buyers contributing 83% of total deal volume. However, with the decline in reported and completed corporate mega-deals (deals greater than $1 billion), total corporate E&M deal value decreased from 81% of disclosed deal value in 2009 to 59% in 2010.

Private equity solidified its presence within certain E&M subsectors with acquisitions of platform and strategic bolt-ons throughout 2010 (particularly within casinos and gaming, recreation and leisure, publishing and broadcasting). The number of private equity-backed deals increased from 126 in 2009 to 140 in 2010, while their announced value nearly doubled from $6.9 billion in 2009 to $13.7 billion in 2010. PwC sees the potential for an increased appetite for mega-deals by private equity firms.

“With almost $1 trillion of untapped committed capital worldwide, private equity is still primed to make significant acquisitions in the future,” Spiegel continued. “Look for a selection of E&M companies to re-evaluate existing business portfolios and accelerate their divestiture plans, as valuations continue to rebound and interest from private equity intensifies.”

More detail of PwC’s Global Entertainment and Media Outlook: 2010–2014 is available here.

USA, New York, NY

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UberMedia acquires Mixx.com

January 25, 2011 — Fusion DigiNet

UberMedia,  the   independent  provider  of  applications  for  reading  and  posting  to  Twitter  and  other  social  media   platforms,  has  announced  its  acquisition  of  Mixx.com. Mixx  has  been  a  leader  in  curating  social   content  into  channels  of  information  that  enable  users  to  find  content  and  people  who  are   relevant  to  their  interests. UberMedia  plans  to  add  these  channels  to  its  family  of  apps,   including  UberTwitter,  Twidroyd  and  Echofon.

“Mixx  has  done  a  tremendous  job  of  pulling  together  content  from  around  the  Twittersphere   and  other  social  media  platforms  and  assembling  it  in  a  way  that  makes  it  easier  and  more   enjoyable  for  users  to  see  things  they  wouldn’t  otherwise  be  exposed  to,”  said  Bill  Gross,  CEO   of  UberMedia. “By  applying  their  technology  and  talent  toward  developing  channels  for  our   apps,  we’ll  be  able  to  bring  engaging  content  right  to  your  phone  alongside  your  timeline.”

UberMedia  is  headquartered  at  Idealab in  Pasadena,  CA.

USA, Pasadena, CA

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Zynga acquires online games developer Area/Code

January 25, 2011 — Fusion DigiNet

Zynga has acquired Facebook and online games developer Area/Code Games. The business is renamed is now Zynga New York.

Area/Code was founded in early 2005 by Frank Lantz and Kevin Slav. Frank Lantz and Demetri Detsaridis remain on as Creative Director and General Manager, respectively; co-founder Kevin Slavin remains, “nearby but focused on other new ventures.

Zynga is the world’s largest social game developer. More than 215 million monthly active users play its games. Zynga’s games include FarmVille, Treasure Isle, Zynga Poker, Mafia Wars, YoVille, Café World, FishVille, PetVille and FrontierVille. Zynga games are available on Facebook, MySpace and the iPhone.

USA, San Francisco, CA & New York, NY

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RockYou acquires social game developer Playdemic

January 14, 2011 — Fusion DigiNet

Social entertainment company RockYou has acquired social game developer Playdemic. Based in Manchester, Playdemic will operate independently as Playdemic, a RockYou studio, and develop Facebook games for the mainstream audience. The acquisition brings extensive game development talent and an established Facebook game, Gourmet Ranch, to the company. Playdemic’s management team has held senior positions at major publishers including Ubisoft, THQ and Eidos. Ian Livingstone, co-founder of Games Workshop and life president of Eidos, was a chief investor in Playdemic. Paul Gouge, CEO and Founder, will lead the studio as VP and General Manager. Terms of the acquisition were not disclosed.
“At RockYou we place great value on the art of game-making,” said Jonathan Knight, RockYou’s SVP of Games, “and we’re elated to welcome the Playdemic team into our studio system. Playdemic will retain their culture and creative control, as they bring their significant game industry experience to making social games of today and tomorrow.”

“Being a part of RockYou gives us the opportunity to remain creatively independent, while leveraging RockYou’s vast network and expertise at scale to reach a wide audience with our games,” Paul Gouge said. “We see a massive opportunity to expand the depth and quality of social games, and have found an ideal partner in RockYou.”

RockYou will grow the user base for Gourmet Ranch, Playdemic’s first title that is currently playable on Facebook with half a million monthly active users. A combined farming and baking simulation, Gourmet Ranch invites players to grow organic crops, raise animals and prepare and serve meals to their friends. Players can use cash to build and decorate their own homestead in a mountain wilderness, trading and helping friends to increase the value of their properties.

USA, Redwood, CA & UK, Manchester

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Research shows smaller buyouts bounce back in 2010

January 11, 2011 — Fusion DigiNet

Source – Lyceum Capital and Cass Business School

The total value of smaller private equity buyouts completed during 2010 rose to over £2.5billion, a 150 per cent increase on 2009 levels, according to data from The UK Growth Buyout Dashboard.

The quarterly trend analysis of private equity transactions in the £10 million to £100 million segment produced by Lyceum Capital and Cass Business School shows 68 companies raised an estimated £2,504 million of buyout funding in 2010. This compares with 34 transactions and £1,045 million of funding during the previous 12 months.
The figures provide further evidence that increasing numbers of successful SMEs are seeking private equity investors’ capital and expertise to drive their post-recession expansion plans.

Commenting on the report, Andrew Aylwin, Partner at Lyceum Capital, said: “The long-term investment outlook is positive. There is a bed-rock of SMEs requiring capital to consolidate their performance and complete the transformation into more mature, high-growth enterprises. This growth will ensure the lower mid-market continues to be a highly attractive asset class for private equity investment that is capable of creating consistently strong returns for investors.”

To go to The UK Growth Buyout Dashboard click here

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US information industry M&A report shows deal value and volume Up 36%

January 7, 2011 — Fusion DigiNet

Berkery Noyes has released its 2010 Information Market M&A Trends Report. The report analyses merger and acquisition activity in the US Information Industry in 2010 and compares it with activity in the three previous years.

Highlights

  • Transaction volume in 2010 surpassed 2009 by 36 percent, climbing to 2,046 transactions.
  • Transaction value has increased by 36 percent as well, with $112 billion in aggregate acquisition value.
  • The median revenue and EBITDA multiple both increased over 2009, with the revenue multiple rising to 1.8 and the EBITDA multiple to 11.2, a 29 percent increase over the 8.7 of 2009.

“Multiples have started to make a return to pre-crisis levels,” said James Berkery, CIO of Berkery Noyes. “There are more deals happening and there are higher valuations. While we’re not at the levels we saw in 2007, I think we’re well on the road to recovery.”

Strategic acquirers have been the most common acquirer in the industry, yet financially sponsored transactions rose 39 percent by value over 2009 while losing 2 percent in volume over 2009. This trend of larger financially sponsored transactions is further evidenced by two of the top seven deals by value this year being made by financial acquirers: Interactive data Corporation’s acquisition by Warbug Pincus and Silver Lake Partners for $3.2 billion and Visma ASA’s acquisition by Kohlberg Kravis Roberts & Co. for $1.9 billion.

Google was not only the most active buyer in the information industry in 2010, with 28 acquisitions, but was also the most active buyer from 2007 through 2010, with 48 transactions during that time.

The largest transaction in 2010 was Intel Corporation’s announced acquisition of McAfee, Inc., for $7.55 billion.

To view the full report click here:

USA, New York, NY

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Games studio Firemint acquires Infinite Interactive

January 6, 2011 — Fusion DigiNet

Games studio Firemint has acquired fellow Australian studio, Infinite Interactive. The move further boosts Firemint’s strength in designing and developing original games, while providing the Infinite Interactive team with a channel for independent publishing.

Firemint was founded by Rob Murray in 1999. It became a highly regarded work-for-hire mobile games studio before shooting to fame with iPhone hits “Flight Control” and “Real Racing” in 2009. Firemint has recently expanded to additional platforms including Nintendo DSiWare, Sony PlayStation Network, and Steam (PC and Mac). The studio now works exclusively on self-published original games.

Infinite Interactive was founded by Steve Fawkner in 1989, and is best known for the “Warlords” and “Puzzle Quest” series of games, both designed by Fawkner. Fawkner is one of the games industry’s pre-eminent innovators, and has created more than 30 games in a career spanning more than 25 years. He takes on a product management position at Firemint, and will continue to work with his current team on a game already under development.

Murray said “I’m incredibly pleased to welcome Steve and his team to Firemint. Steve is an outstanding game designer and our two studios evolved very similar philosophies of developing addictive, fun and polished original games. By bringing our studios’ talents together, we will be able to create even more awesome games – and more of them.”

Fawkner commented, “Firemint has had huge success designing, developing and publishing great original games. By joining forces, we now have a way to further develop some of the exciting new concepts we’ve been working on. This new position really frees me up to focus on game design and I can’t wait to get stuck into it!”

Murray and Fawkner first met in 2003 and in early 2006, Fawkner showed Murray an early version of Puzzle Quest, which he had prototyped over his Christmas holiday. Murray explained, “Steve and I have been talking about working together for a long time, and I remember him showing me an early version of Puzzle Quest. This inspired me to make a game during my own holidays two years later, which was Flight Control – and now, another two years later, we’ve finally found a way to work together!”

Both studios are based in Melbourne, and will be consolidated in one location at Firemint’s recently expanded offices. All games developed by the studio will be released under the Firemint name. Financial terms of the deal were not disclosed.

Australia, Melbourne

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Online game operator The9 to form $100 million investment fund

December 28, 2010 — Fusion DigiNet

The9, an online game operator and developer in China, is planning a to form a $100 million investment fund (Fund9) with the help of Chengwei Ventures, ChinaRock Capital Management and China Renaissance K2 Ventures

Fund9 will focus on investments in both domestic and overseas mobile internet application and platform developers. All mobile internet application and platform project proposals can be directly submitted online to the fund investment committee for evaluation.

Mr. Jun Zhu, The9’s Chairman and Chief Executive Officer, commented, “Mobile internet application and platform has become a significant part of the mobile and internet industry with a rapidly growing number of smartphone users, especially in China. We noticed that there are many talented and creative domestic development teams in need of support during their development. If they receive financial and other support such as marketing, operation and administration, their chance of success will be much higher. I believe Fund9 has a unique opportunity to provide such support to these talented developers who will be able to launch more advanced mobile applications that will ultimately benefit all mobile internet users. We will also target talented overseas mobile internet application and platform developers with the ultimate goal of bringing the best products to China.”

China, Shanghai

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Viacom sells loss making Harmonix Music Systems to Columbus Nova

December 23, 2010 — Fusion DigiNet

Viacom has sold its loss making business Harmonix Music Systems to to Harmonix-SBE Holdings, an affiliate of  investment firm Columbus Nova. Harmonix is the make of the “Rock Band” video games.

Financial terms of the sale were not disclosed. Viacom had announced its intention to sell Harmonix in November. The Harmonix business has been hitting Viacom’s earnings as the video games sector slowes down.

Shares of Viacom closed down 42 cents at $45.67.

USA, New York, NY

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