Korean casino game developer revives Nasdaq IPO plan

DoubleDown Interactive LLC, a South Korean social casino game publisher, has resumed its Nasdaq listing process, tapping the red-hot US IPO market with improved earnings amid the social distancing trend. 

The mobile and web-based game developer recently submitted a revised Form F-1, a statement required for a US listing, to the US Securities and Exchange Commission.

The revised statement updated its financial details filed in June 2020, reflecting a 44% year-on-year surge in net profit on a 32.6% increase in revenue last year, according to investment banking sources on Apr. 2.

DoubleDown Interactive plans to sell 400,000 new shares worth 117.4 billion won ($104 million) in June of this year, based on which it will issue American depository receipts for overseas investors. Details about the issuance size and pricing will be determined after bookbuilding.

In July of last year, the company shelved its Nasdaq listing plans after a lukewarm response at the height of the global pandemic. Its then aborted IPO was priced at $15.6 per share, below its proposed $17-$19 range. Accordingly, the game company cut its IPO size by more than half to $86 million before eventually postponing it.

But the atmosphere has changed since the start of this year, following South Korea's No. 2 e-commerce platform Coupang Corp's $4.6 billion IPO on the New York Stock Exchange last month. Its spectacular US listing and the buoyant IPO market prompted other Korean startups, including premium food delivery company Kurly Inc., to follow suit.

Now DoubleDown is expected to raise its price band above last year's indicative range, as well as the size of its offering. It was one of the beneficiaries of the stay-at-home trend, racking up 64.8 billion won in net profit on revenue of 423 billion won last year.

Applying the gaming industry's average price-to-earnings ratio of 30, DoubleDown could be valued at around 2 trillion won, higher than its projection of 1.2 trillion won last year. That compares to the 950 billion won bill paid by DoubleU Games Co., listed on South Korea's Kospi, to take over the casino gaming company in 2017. 

Seoul-based STIC Investments is likely to lock in hundreds of millions of dollars in proceeds from its divestment of the game publisher. STIC financed the 2017 purchase of DoubleDown with an investment of 300 billion won. Now the investment firm controls 32.3% of DoubleDown after converting the latter's bonds into new shares in May 2020. 

JPMorgan and Macquarie Capital are joint bookrunners of DoubleDown, with Citibank in charge of floating ADRs based on DoubleDown's domestic shares.

Write to Ye-Jin Jun at ace@hankyung.com
Yeonhee Kim edited this article.