Carlyle explores £1bn sale of UK video video games maker Jagex

Obtain free Carlyle Group LP updates

We’ll ship you a myFT Day by day Digest e mail rounding up the most recent Carlyle Group LP information each morning.

Non-public fairness group Carlyle has employed advisers to discover a sale of its UK video video games developer Jagex, which may very well be price greater than £1bn.

Jagex, which is finest identified for the long-running RuneScape franchise, is working with bankers at Morgan Stanley and boutique advisory Aream & Co, in accordance with folks conversant in the method. The Cambridge-based developer may fetch greater than £1bn in a sale, these folks added.

Discussions are at an early stage and the sale course of may run from the top of this 12 months till the primary half of 2024, the folks cautioned.

The corporate had beforehand been seen as a candidate for a UK preliminary public providing. A number of London-listed video video games builders, together with Codemasters and Sumo Digital, have disappeared from the UK public markets lately following international takeovers.

Based in 2001, Jagex has handed by a number of house owners earlier than Carlyle acquired the corporate two years in the past for an undisclosed sum. Virtually 300mn folks have performed RuneScape — a multiplayer on-line recreation set in a medieval fantasy world — over the previous twenty years, Jagex says.

The final proprietor earlier than Carlyle was the asset supervisor Macarthur Fortune Holding, which paid $530mn to purchase Jagex in 2020 from Shanghai Hongtou Community Expertise.

In its newest filings to Corporations Home, Jagex reported annual revenues in 2021 that rose 4 per cent to £125mn. Nevertheless, revenue slipped barely that 12 months to £37mn as a result of one-off prices attributable to the corporate’s sale.

M&A volumes within the international gaming sector have risen because the onset of the Covid-19 pandemic in 2020 because the variety of avid gamers boomed. New insurance policies similar to Apple’s privateness push have additionally enhanced the worth of scale for promoting functions, despite the fact that the worldwide video games market declined general final 12 months.

Earlier this 12 months the Saudi wealth fund-owned Savvy Video games Group acquired US-based video games developer Scopely for $4.9bn within the kingdom’s newest gaming funding.

On the similar time, personal fairness teams are beneath stress to exit investments and generate money for his or her institutional backers at a time when the UK faces a slowdown in public listings.

Offers between personal fairness teams in Europe have plunged to their lowest ranges because the pandemic because the buyout recreation of pass-the-parcel is hit by rising debt prices and buyers’ issues concerning the financial outlook.

Within the first three months of this 12 months, the worth of offers struck between rival personal fairness teams in Europe fell to its lowest level because the second quarter of 2020, in accordance with knowledge supplier PitchBook, as buyout homes in search of to exit investments struggled to agree on costs.

Representatives for Carlyle, Morgan Stanley and Aream declined to remark.