KaKao

-       Kakao makes strategic investment to bring innovation to mobile content platform in addition to its O2O, gaming and mobile banking business

-       Kakao will acquire a 76.4 percent stake in Loen Entertainment Co., provider of MelOn, for KRW 1.87 trillion

[Seoul, South Korea – January 11, 2016] Kakao Corp. (CEO Jimmy Rim) today announced the acquisition of Loen Entertainment Co. (CEO Wonsoo Shin), Korea’s premier music download/streaming platform provider. Kakao’s purchase of a 76.4 percent stake in Loen for KRW 1.87 trillion is part of the company’s continued efforts to bring innovation to the company’s mobile content platforms, which includes O2O, mobile gaming and mobile banking businesses.

The strategic acquisition provides Kakao with key assets to create new content platforms and expand into global markets by leveraging Kakao’s numerous mobile platforms and Loen’s extensive music content.

Kakao has strengthened the company’s presence in the content platform business, with confidence that it will be the next growth driver in the mobile era.  As part of this effort, Kakao has been expanding its mobile content platform through 1boon, and strengthened its video streaming platform through Kakao TV and Daum tvPot. It also recently acquired Podotree, which has successfully monetized a mobile content platform through Kakao Page, as a subsidiary company.

The synergy from the acquisition will allow Kakao to generate new demand in the content business by adding music streaming to its existing portfolio of content services. As it has done with emoticon artists, Kakao will also lay the foundation for an artist-driven ecosystem, and utilize the resulting high quality content to service international markets down the line.

Loen’s services are expected to see a boost in user engagement, while also presenting new type of music services leveraging Kakao’s powerful mobile platform. Loen will continue to solidify its position as Korea’s premier music platform with new services including streaming services based on social networks, user database-driven music curation, artist centered online music creation communities, and services that intertwine with other content in Kakao’s multiple platforms.

“Music is one of the most loved content genre in the mobile era.it is also incredibly powerful in that one song can set trends for an entire generation and highly influence the global pop culture,” said Jimmy Rim, CEO of Kakao.

Rim added, “By combining Kakao’s various platforms and content services and Loen’s leading music content, we expect tremendous synergy that could establish a strong foundation for global expansion.”

“We had already established a strong partnership with Kakao as a result of our participation in Kakao Bank,” said Wonsoo Shin, CEO of Loen Entertainment.  Shin added, “We expect to grow further with Kakao and become the leading content provider in Korea and beyond.”

To secure funds for the acquisition, Kakao will issue KRW 750 billion in new stocks to Star Invest Holdings Limited (Investment vehicle set up by Affinity Equity Partners), Loen’s previous majority shareholder, and others. The rest will be covered via Kakao’s cash holdings, M&A financing and by inviting outside investments. [END]