A private equity company behind the Six Nations Rugby tournament is on the verge of buying RuneScape developer Jagex for a cool £900 million, according to a report by Sky News.
CVC Capital Partners is a Luxembourg-based “private equity platform” that “manages €118 billion of assets”. Its investment portfolio includes the Six Nations Rugby Tournament, the courier service Hermes, and the RAC. It also previously owned Formula 1, which it sold to Liberty Media in 2016.
Now, according to Sky News, the firm is in “advanced talks” to purchase Jagex from its current owner Carlyle Group, which has owned the Cambridge-based developer since January 2021. A source told Sky News that the deal had been arranged by CVC’s sports, media and entertainment team alongside UK partners, as part of a move to invest in IPs with large international fan communities.
Carlyle reportedly considered an initial public offering, but ultimately opted to sell the company outright. It hoped to achieve a valuation of £1bn for Jagex, but uncertainties expressed by several private equity firms about Jagex’s business pipeline lowered Carlyle’s prospects.
Big acquisitions of video game companies are all the rage lately, though the benefits these acquisitions bring to the industry are debatable to say the least. After finally completing its acquisition of Activision Blizzard following years of drama, Microsoft promptly laid off almost 2,000 people. Then there’s Embracer Group, which spent years hoovering up studios to complete a $2 billion dollar deal, failed to see the deal through, and enacted a brutal strategy of consolidation, laying off hundreds of developers, closing studios like Volition, and cancelling projects like a new Deus Ex.
For RuneScape though, acquisitions are nothing new. If it goes through, CVC’s purchase would mark the fourth time in less than a decade that RuneScape has been passed from one venture capital firm to another. Carlyle Group bought Jagex from Macarthur Fortune Holding, who bought it from Shanghai Hongtou Network Technology less than a year before selling it to Carlyle. Shanghai Hongtou, in turn, made the initial purchase of the company in 2016. At this rate, expect CVC to sell RuneScape to Lotsa Money Group sometime in the next six months.
