K Wave Media Ltd., an umbrella entity of South Korean entertainment companies, is set to go public on the Nasdaq next month in a bid to raise money from global investors for content production and crank up its bargaining power with major content distributors such as Netflix Inc.
The company, formerly K Enter Holdings Inc., plans to hold a shareholder meeting to approve a merger with Global Star Acquisition Inc. to trade on the Nasdaq Stock Market under the symbol KWM in February, according to stock market industry sources in Seoul on Friday.
K Wave and Global Star, a Nasdaq-listed special purpose acquisition company (SPAC), said on Dec. 31, 2024, that the US Securities and Exchange Commission (SEC) has approved the two companies’ merger.
13 RATHER THAN SIX MONTHS
K Wave filed a securities registration statement with the SEC in November 2023.
The SEC may have taken longer than the usual six months for an initial public offering to protect investors, given the complexity of K Wave’s listing through a SPAC deal, industry sources in Seoul said.
A SPAC is a publicly traded firm created to acquire or merge with an existing company.
“It is rare in Korea and the US for a holding company with many subsidiaries to go public through a SPAC,” said a Global Star official. “The SEC spent a lot of time identifying and reviewing the deal's structure.”
A scene from the film A Taxi Driver (File photo by Showbox Corp.) COALITION OF SIX MAJOR PLAYERS
K Wave is a holding company of six domestic entertainment firms including Solaire Partners Ltd., a Seoul-based private equity firm that has invested in some of Korea's highest-grossing films, including the Oscar-winning Parasite.
Also joining the K Wave entity are: The Lamp Co., which produced A Taxi Driver, a hit film based on a true story from the 1980 pro-democracy rallies, Apeitda Production, the force behind The Witch; Studio ANSEILLEN; and IP merchandiser Play Company.
Initially, the plan was for K Wave to be comprised of seven domestic entertainment firms. One firm decided to bow out of the coalition, however, causing K Wave’s corporate value to shrink to $590 million from the original $610 million.
BETTER BARGAINING POWER FOR MORE GLOBAL BOX OFFICE HITS
Global Fund LLC, an investor in Global Star, proposed the lineup of Korean entertainment companies to capitalize on the global craze for K-content.
Global Fund is a US private equity firm that focuses on helping Asian companies go public on the Nasdaq through SPAC listings.
Korean actor Lee Jung-jae as Seong Gi-hun in Squid Game Season 2 (File photo by Netflix) Global Fund has been working on the deal since October 2022 with Samjong KPMG, the Korean unit of global accounting and consulting firm KPMG.
The holding company aims to not only supply intellectual property to over-the-top (OTT) media platforms but also take the initiative in content distribution deals by paying 30-40% of production costs to jointly own IP rights.
