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Razer proposes to acquire MOL Global at valuation of US$100m, to expand gaming and e-payment business in South-east Asia

SINGAPOREAN-FOUNDED gaming company Razer has proposed to fully acquire Malaysia's e-payments platform MOL Global at a valuation of US$100 million - to build up its e-payment capabilities and accelerate its business in South-east Asia. MOL Global is a company in which Razer already has a nearly 35 per cent stake.

Razer - dual-headquartered in Singapore and San Francisco, and listed on the Hong Kong Stock Exchange - said on Monday that it will fork out some US$61 million in cash to acquire 65.1 per cent of MOL Global's issued share capital, which represents the remaining shares in MOL Global it does not already own.

Its proposed acquisition of MOL Global will be by way of a statutory merger, upon which MOL Global will become a wholly-owned subsidiary of Razer.

Razer's zGold virtual credits business will be combined with MOL Global's MOLPoints virtual credits business, creating one of the world's largest virtual credits platforms for gamers under a single entity, Razer chief and co-founder Tan Min-Liang told The Business Times.

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zGold (Razer's virtual credit), like MOLPoints (MOL Global's virtual credit), can be used to purchase online game credits and digital content. The new combined virtual credit will be rebranded as zGold, said Mr Tan.

With the merger, Razer's zGold will be accepted as payment for over 2,500 digital content and game titles from the MOL Global network, which includes digital content providers, telcos and online merchants. This is up from the current 20 titles in the zGold content library, BT has learnt.

MOL Global is believed to run one of South-east Asia's largest e-payment networks. It handled over US$1.1 billion in total payment value through its network in 2017, and its clients include Lazada, Uniqlo and Grab.

Razer said that given the region's low credit card penetration, MOL Global's "unique offline-to-online payment" model - with approximately one million offline payment points - has enabled world-leading games companies such as Sony PlayStation Store SEA, Facebook Gameroom, Nexon and Wargaming to monetise their games and digital content in the region.

"This will significantly accelerate and scale up the 'services' category within Razer's gamer-focused ecosystem, allowing games and media companies to continue to further monetise their games and content worldwide on a singular platform which will benefit from the combined economies of scale."

Razer has emphasised that its goal is to build the world's largest gaming ecosystem of hardware, software and services.

Razer added that that the proposed acquisition will provide a springboard for its entry and accelerated growth in a new business category, e-payments, which is "complementary and accretive" to Razer's current business.

The proposed acquisition of MOL Global will also help expand Razer's current business in South-east Asia.

Mr Tan said: "South-east Asia represents one of the highest GDP (gross domestic product) growth regions with one of the youngest demographics in the world.

"Given that MOL Global already runs one of the largest e-payments networks in South-east Asia, the integration of MOL Global's businesses represents an exciting new business segment with boundless potential that Razer can extend into. Over and above, we will be able to leverage MOL Global's leading technologies, as well as its massive network of content, customers and partners built over 17 years, to extend our existing businesses in this fast-growing and previously underpenetrated region for Razer."

Earlier this month, Razer announced a partnership with Lazada that was also aimed at expanding Razer's presence in South-east Asia. The Razer Game Store on Lazada - the offspring of the partnership - is a region-centric digital game store which offers South-east Asian users access to hundreds of curated digital games, including new releases such as Far Cry 5 and classics such as Grand Theft Auto V and Assassin's CreedOrigins.

Last July, Razer announced that it had acquired a 19.9 per cent stake in MOL Global for an undisclosed sum, marking Razer's first investment in and strategic partnership with an e-payments company.

MOL Global, backed by Malaysian tycoon Vincent Tan (who is founder of Berjaya Corporation), had a short-lived run on Nasdaq, where it was listed for just under two years from October 2014 to April 2016. It had in October 2015 received a non-compliance letter from Nasdaq notifying that it no longer met the minimum bid price (US$1 per American Depository Share) required for continued listing.