Kakao Games acquires 39.56% stake in social casino developer ME2ON for $72.1m

South Korea-based mobile games publisher Kakao Games is acquiring a 39.56% stake in social casino and casual games developer ME2ON for $72.1m (KRW 98.0B) through two transactions its board approved on September 15.

Kakao Games will buy 7,011,390 existing shares representing a 21.43% block from founder and CEO Son Chang-wook and eight related parties at KRW 10,000 per share, totaling $51.6m (KRW 70.1B). ME2ON is simultaneously issuing 9,817,118 new shares at KRW 2,842 per share for $20.5m (KRW 27.9B), with KRW 19.2B directed to working capital and KRW 8.7B toward debt repayment.

The acquisition price of KRW 10,000 represents a 3.2x premium over ME2ON's closing price of KRW 3,110 on September 14, a 221.5% control premium. At the block price, ME2ON's equity values at $240.7m on a fully diluted basis, equivalent to 2.7x FY2025 revenue of $85.1m and 26.0x EBIT of $8.9m. The day before announcement, the market valued the same equity at $74.9m, or 0.8x revenue and 8.1x EBIT.

Both transactions are scheduled to settle on November 16, 2026, subject to Korea Fair Trade Commission clearance, with new shares listing on December 1. Kakao Games will become the largest shareholder and appoint board members at closing.

ME2ON, founded in 2010 and listed on KOSDAQ in 2016, develops social casino apps including Full House Casino with over 8 million downloads across app stores, Fulpot Poker, and Classic Vegas Casino. Its 45.1%-owned subsidiary Ghost Studio develops casual titles including the card game TriPeaks Journey and the match-3 puzzle Match Miracle: Triple Match 3D.

In FY2025, ME2ON's revenue split across games (61%, $51.5m), talent management and drama production through Ghost Studio Entertainment (31%, $26.4m), and webtoon and web novel production through Bluepic and Metoon&Novel (8%, $7.1m). North America accounted for 65% of games revenue in Q2'26. Revenue rose 28% in won terms during FY2025 after a 13% decline in FY2024. EBIT fell from $30.1m in FY2021 to $8.7m in FY2024 before recovering 7% in won terms to $8.9m in FY2025.

This acquisition marks the first deal under Kakao Games' new ownership. Japan's LY Corporation took control in June through a $370m restructuring and appointed co-CEOs Kim Tae-hwan, formerly of Nexon and LINE Games, and Lee Si-woo. Kakao Games' FY2025 revenue fell 26% to $327.0m with an operating loss of $27.9m. In August, Kim told investors the company was reviewing more than 10 domestic and international acquisition targets. Lee stated, "This acquisition marks the first step in executing a merger and acquisition strategy with proven business feasibility and profitability under our new leadership, and Kakao Games will continue to pursue M&A for its future."

The deal follows Kakao Games-backed Align Studio's purchase of the ArcheAge MMORPG IP from XL Games for $29.2m the previous week.