Angry Birds Maker Plans IPO That May Value It at $2 Billion

Updated on
  • Developer of mobile titles seeks funds for gaming expansion
  • Sequel for “The Angry Birds Movie” is also in the works

Angry Birds Maker Rovio Plans IPO

Angry Birds maker Rovio Entertainment Oy plans to sell shares in a Helsinki initial public offering, seeking funds to support its resurgence seven years after releasing its best-selling mobile-game title.

Main owner Kaj Hed, 62, and some other holders will sell shares, and Rovio will offer about 30 million euros ($36 million) of new stock, the company said Tuesday, without providing a total value for the sale. The IPO could value the maker of the Angry Birds mobile games and movie at about $2 billion, people familiar with the matter said last month.

Rovio has emerged from a slump after changing the way it charges for game playing, and an IPO gives Chief Executive Officer Kati Levoranta ammunition to develop new titles. The listing is set to test investors’ appetite for entertainment software, a group whose shares have barely budged from their offer prices following IPOs this year, according to data compiled by Bloomberg.

Mobile-game makers often struggle to replicate the success of initial blockbusters. King Digital Entertainment Plc, the creator of Candy Crush, was acquired in 2015 for a 20 percent discount to its IPO price amid revenue declines. And Netmarble Games Corp., the maker of the Lineage and Stone Age mobile games -- and South Korea’s biggest listing in seven years -- has declined about 4 percent since its shares started trading in May.

To read Gadfly’s piece about the risks of an Angry Birds IPO, click here

A $2 billion valuation would translate into a $1.4 billion fortune for director Hed, according to the Bloomberg Billionaires Index. He holds about 69 percent of Rovio after investing 1 million euros more than a decade ago into the company co-founded by his nephew Niklas Hed.

Growth Hunt

Proceeds from an IPO could also help the company fund the “Angry Birds Movie 2,” planned for 2019. The company’s first film in the franchise, released last year, made about $350 million in worldwide box-office sales.

Rovio, based in Espoo, Finland, last month reported second-quarter revenue growth of 94 percent to 86.2 million euros, with the games business increasing sales 65 percent to 61.3 million euros. The company is benefiting from a new strategy that places more focus on in-game purchasing and advertising instead of paid downloads.

While the various Angry Birds versions have been downloaded billions of times, Rovio’s other titles have yet to match that success. The company’s biggest money-maker is now Angry Birds 2, a follow-up to the original title which became the best-earning app in Apple Inc.’s U.S. store in 2010. New titles launched this year include Battle Bay and Angry Birds Evolution.

“All of our recent launches -- Angry Birds Evolution, Battle Bay and Angry Birds Match -- have shown better performance in key performance indicators than any previously launched Rovio game, thus suggesting additional growth potential ahead,” Levoranta said in a statement.

Europe IPOs

While Rovio didn’t give details of the planned IPO’s total size, it could be valued at about $400 million, people familiar with the matter said last month. That would make the IPO the biggest in Helsinki since the listing of wireless carrier DNA Oyj last year.

Carnegie Bank A/S, Danske Bank A/S and Deutsche Bank AG are among banks arranging Rovio’s IPO.

Companies in Europe have raised about $37 billion from IPOs this year, up about 88 percent from the same period in 2016, according to data compiled by Bloomberg. The rest of the year is likely to be busy too, with expected issuers including Italian tiremaker Pirelli & C. and En+ Group Ltd., the power and metals business controlled by Russian billionaire Oleg Deripaska.

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