IRIVER, promoting a new content-based business by merging with SM affiliates10.13.2021
IRIVER, promoting a new content-based business
by merging with SM affiliates
Increase capital by issuing new stocks, KRW 25 billion from SK Telecom and KRW 40 billion from SM Entertainment
SM MC Merger and Acquisition of SM LDC
Securing various new business opportunities derived from SM C&C
On July 17, IRIVER held a board meeting and resolved to increase capital by issuing new stocks such as KRW 25 billion from SK Telecom and KRW 40 billion from SM Entertainment, acquire SM LDC/MC and allow SM Entertainment to become the second- largest shareholder of merged IRIVER.
The main brand of IRIVER is Astell&Kern, which has the strengths in product planning and design, but Astell&Kern, the flagship product, stayed in the niche market with limited growth potential. Through this strategic investment, IRIVER was able to secure a growth engine to promote the "AI based content-based business" based on AI and ICT related capabilities of SK Telecom and intellectual property rights and content production capabilities of SM Entertainment's. IRIVER is planning to launch a global new business by capturing diverse business opportunities derived secondarily or tertiarily by integrating Korean entertainment contents into devices through SM Entertainment's strategic investment.
IRIVER, Securing various new business opportunities derived from SM C&C
IRIVER will increase KRW 65 billion, KRW 25 billion from SK Telecom and KRW 40 billion from SM Entertainment. Also, IRIVER will merge with SM Mobile Communications (SM MC) and acquire SM LDC (Life Design Co.) at KRW 30 billion to incorporate into its 100% subsidiary.
The merger ratio of IRIVER and SM MC is 'IRIVER: SM MC = 1: 1.604174502' with SK Telecom taking up 46 percent of the shares, while SM Entertainment holds 20.6% for the merged corporation. The merger will be approved at the IRIVER shareholders' meeting in August, and the merger will be completed by October this year. Meanwhile, SM LDC's transfer of stocks is scheduled to be completed in September.
SM MC was kicked off last year as a mobile content developer, with SK Telecom taking up 46 percent of the shares, while SM holds the remaining 54 percent. SM MC is preparing music platform business for the K-pop fandom in Japan.
SM LDC is a Merchandising company that provides performance tools and entertainer related products for Japanese fans. SM LDC is generating stable profits from sales worth more than KRW 11 billion per annum based on the high royalties of its fans.
As a result of this M&A, IRIVER was able to secure the opportunity to launch new businesses for more than 10 million SM fans worldwide as it acquired the SM Company as an ally in addition to the existing Astell&Kern business. Also, it can expand its business for K-Pop fans in Japan and China.