CVC Capital Weighs Joining Management Buyout of Razer
By Vinicy Chan, Manuel Baigorri, and Cathy Chan
12. November 2021, 09:55 MEZ Updated on 12. November 2021, 11:33 MEZ
Buyout firm among investors eyeing $2.9 billion company
Razer could relist in the U.S. following take-private deal
CVC Capital Partners is among the investors considering joining the management of Razer Inc. in a potential deal to buy the gaming peripherals maker and take it private, according to people familiar with the matter.
The buyout firm is working with financial advisers and is weighing backing a possible privatization bid for Razer led by co-founder and Chief Executive Officer Min-Liang Tan, the people said, asking not to be identified as the information is private. The group is evaluating a possible relisting of the company in the U.S. once the privatization is complete, one of the people said.
Tan and board member Kaling Lim are in talks with financial investors about a transaction involving the Singaporean company which may or may not lead to a general offer for its shares, the company said in a filing to the Hong Kong Stock Exchange on Oct. 29.
Deliberations are ongoing and the group could decide not to proceed with any transaction, the people said. Tan and representatives for CVC and Razer declined to comment.
Shares in the company surged nearly 14% on Friday to HK$2.54, giving it a market value of HK$22.2 billion ($2.9 billion). The share price is still below the HK$3.88 set in its initial public offering in 2017.
The company, which makes gaming keyboards, mice and other accessories, has struggled in efforts to expand into financial services. It shuttered its e-wallet Razer Pay in August after failing to make the list of firms granted licenses from the Singapore government last year to launch digital banks.
Tan controls a 34% stake in Razer, while Lim has 23%, according to the exchange filing. Tan told CNBC in August the company was holding “internal discussions” on whether to go public in the U.S.
Razer recorded its first annual profit since 2014 last year, as the coronavirus pandemic drove demand for gaming. The company reported net income of $34 million in the first half of 2021, compared with a loss of $17.3 million a year earlier.
CVC completed its takeover of Japanese street wear label A Bathing Ape from I.T. Ltd. in June after privatizing the Hong Kong-based company with founder Sham Kar Wai last year, and restructuring the business.
— With assistance by Elffie Chew, Yoolim Lee, and Shiyin Chen
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