April 27, 2010 4:33 pm

Bigpoint mandates adviser for possible sale

This article is provided to FT.com readers by mergermarket—a news service focused on providing actionable, origination intelligence to M&A professionals. www.mergermarket.com
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Bigpoint GmbH, the German online gaming portal, has hired advisors to look at a sale, three bankers claiming knowledge of the situation told mergermarket. Financial advisors have been mandated to explore strategic alternatives following strong inbound interest, two of the bankers said.

US-based investment advisory firm Montgomery & Co. has been appointed, according to one of the bankers.

Private equity backers GMT Communication Partners and NBC Universal’s Peacock Equity Fund are seeking between USD 300m and USD 400m for 100% of the company, the first banker said. The group is believed to have generated strong growth and began to interview advisors several months ago.

Bigpoint and Peacock Equity declined comment. GMT and Montgomery & Co. could not be reached for comment.

Germany-based Corporate Finance Partners had previously advised Bigpoint in its June 2008 private equity buyout. The firms purchased a 70% stake in Bigpoint for EUR 70m (USD 110m), buying out existing shareholders Aurelia Private Equity, European Founders Fund and United Internet Beteiligungen. The remaining 30% of the company is held by CEO and founder Heiko Hubertz.

Bigpoint generated revenues of EUR 26m (USD 35m) in 2008, up from EUR 10m (USD 13m) in 2007, according to company documents.

A sale to a strategic buyer is the most likely outcome for Bigpoint, a European-based sector banker said. Acquirers could include console gaming companies like Electronic Arts and Activision whose traditional handheld business has slowed due to explosive growth in online gaming. Chinese gaming companies like Tencent and Shanda are also likely buyers, as well as US media conglomerates such as Time Warner, Disney and Hearst.

“It wouldn’t surprise me if [Bigpoint] sold for a similar amount to Playfish [which was recently sold to Electronic Arts for USD 300m],” the sector banker said. “There are only a handful of sizeable players in the sectors and there’s also a lot of M&A in the sector at the moment.”

Bigpoint draws over 117 million users for its 50 online games, according to the company’s website. The company opened a San Francisco office early this year to aid its expansion into US markets.

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