Phoenix Digital to Acquire 55% Stake in Douwan

Shanghai Stock Exchange, 9/11/13

Phoenix Digital Media, the digital content subsidiary of Jiangsu-based book publisher and distributor Phoenix Publishing & Media (601928.SH), has announced that the company has acquired a 55% stake in Shanghai-based browser game developer and operator Douwan for RMB 277 mln. The acquisition will take effect upon approval by the board of directors of Phoenix Digital Media, and does not require approval by the company's shareholders.

Douwan was founded in August 2012 with registered capital of RMB 10 mln. Phoenix Digital Media's acquisition price for Douwan values the company at nine times its projected net profit for 2013, estimated to be at least RMB 56 mln. Under the terms of the acquisition agreement, if Douwan does not achieve net profits of RMB 56 mln, RMB 70 mln, and RMB 87.5 mln in 2013, 2014, and 2015, respectively, its shareholders will be obligated to pay compensation to Phoenix Digital Media.

Editor's Note: For more information on this topic, please see "Update: Phoenix Publishing to Acquire 64% Stake in Muhe," MD 8/22/13 issue.

Keywords: browser game Internet profit Douwan Phoenix Publishing 601928.SH M&A online gaming

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