Asian private equity firm Trustar Capital is closing in on an agreement to acquire Lingxi Games, the video game division of Alibaba Group, in a transaction that could value the business at more than $1.5bn, according to Private Equity Wire.
Transaction Details
Trustar has emerged as the preferred bidder after beating rival suitors, including strategic buyers from the gaming industry. Discussions remain ongoing and a final agreement has yet to be reached.
Lingxi Games
Lingxi Games is best known for ‘Three Kingdoms: Strategy Edition’, a multi-player strategy title developed in partnership with Japanese gaming company Koei Tecmo. The game has become the studio’s flagship and highest-grossing release.
Alibaba Portfolio Streamlining
The potential sale forms part of Alibaba’s wider effort to streamline its portfolio under chief executive Eddie Wu. The Chinese technology group has been reducing its exposure to non-core businesses while directing greater resources towards artificial intelligence and cloud computing, according to Private Equity Wire.
Alibaba has already pursued a series of asset disposals as part of that strategy, including the sale of its interest in Sun Art Retail Group to private equity firm DCP Capital for about $1.6bn last year. The company had previously been reported to be seeking as much as RMB9bn ($1.3bn) for Lingxi, making a transaction above $1.5bn potentially more lucrative than earlier expectations, according to Private Equity Wire.
