Nexon America, via Business WireNexon, a video game developer founded in South Korea.
TOKYO – The online game company Nexon, a fast-growing Asian rival to Zynga, on Monday set the price for its initial public offering at 1,300 yen a share, a debut that could value the company at 560 billion yen, or $7.2 billion.
The public offering by Nexon — on track to be the biggest Japanese I.P.O. this year — underscores investor confidence that online game companies will continue to grow despite a cloudy outlook for the global economy. Nexon is expected to go public on Dec. 14 on the Tokyo Stock Exchange.
Founded in South Korea in 1994, Nexon has been a pioneer in developing free online games that users can access at no charge, but must pay for virtual goods like clothes and tools for their avatars.
Zynga, which has grown rapidly by developing such games on Facebook, set its price range last week. The offering, which aims to raise about a billion dollars, could value the company at $7 billion.
Though that pricing reflects tempered expectations in the I.P.O. market, it will still be the biggest technology offering in the United States since Google in 2004.
In a filing with the Tokyo Stock Exchange, Nexon said it would price its shares at 1,300 yen, compared with an expected range of 1,200 to 1,400 yen. At that price, Nexon could raise about 91.1 billion yen ($1.17 billion), the largest I.P.O. since the pharmaceutical company Otsuka Holdings raised 160 billion yen in December 2010. It is offering 70,100,000 shares, with an option for its underwriter, Nomura Securities, to sell an additional 5.3 million shares, depending on demand.
The company has hired Morgan Stanley, Nomura and Goldman Sachs to serve as the joint global coordinators for the offering.
Nexon has more than 77 million active monthly users, compared with Zynga’s 260 million. Net profit at Nexon, which employs 3,240 people, mostly in its native South Korea, has nearly tripled in the last two years, to 21.64 billion yen in 2010, according to its filing with the Tokyo exchange. In the same period, revenue has roughly doubled, to 69.78 billion yen.
The company, which plans to use the proceeds to repay debt, build facilities and invest in product development, derives most of its business from Asia. Last year, China and South Korea accounted for 66 percent of revenue.
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