Big Hit Entertainment, the South Korea-based talent management agency and record producer backed by mobile game developer Netmarble, has priced an initial public offering that will raise almost KRW963bn ($842m).
The offering will consist of 7.13 million shares issued on South Korea’s Kospi stock exchange that were priced at the top of their range at roughly $118 per share. It has been scheduled for October 15 and will give Big Hit a market capitalisation of about $4.2bn.
About 60% of the shares will be made available to institutional investors while Big Hit employees and retail investors will be able to buy 20% each.
Founded in 2005, Big Hit develops K-pop groups and releases their music through its own label, in addition to managing the artists.
The company specialises in ‘idol’ teen groups and its largest act is BTS, the seven-piece boy band whose last album was the biggest selling in South Korean history, and who recently reached number one in the United States with its first English language single.
Netmarble paid approximately $190m for a 25.7% stake in the company in April 2018, and private equity firm Stic Entertainment invested a further $90.9 m six months later.
Bang Si-hyuk, founder and chief executive of Big Hit, will remain its largest shareholder, with a 34% stake post-IPO, according to Nikkei. Netmarble will own 20% of its shares and Stic Investment 7%.
BTS themselves, who were reportedly responsible for almost 88% of Big Hit’s revenue in the first half of 2020, were granted a 1% stake by the company in August this year. It made a sales profit of about $81m in 2019 from approximately $483m in revenue.
