Sony Music Entertainment is gearing up to compete against private equity giants Blackstone Inc. and KKR & Co. in a bid to acquire Japanese e-comics provider Infocom Corp. The deal, estimated to be valued at around $1.3 billion, signals Sony's strategic move to expand its content offerings and delve deeper into the lucrative world of digital manga.
A second round of bidding for Teijin Ltd.'s entire stake in Infocom is slated for this month, according to sources familiar with the matter. Sony Group Corp.'s music arm is in talks with Japanese fund Integral Corp., contemplating a joint offer to acquire all of Infocom's shares. This move aims to take the Mecha Comics manga app operator private, with Teijin currently holding a majority stake of 55.1% in Infocom.
The interest from Sony adds weight to the potential sale of Infocom, according to SMBC Nikko Securities analyst Go Miyamoto, who projects the proceeds and gains from the sale to potentially reach $0.75 billion. Sony's expanding portfolio includes partnerships like the proposed $26 billion acquisition of Paramount Global, highlighting its pursuit of high-profile deals and a broader content strategy.
While Sony's shares experienced a dip in Tokyo, reflecting concerns over financing the Paramount deal, Infocom shares remained untraded with a surge of buy orders, poised to rise by their daily limit. Teijin's stock, on the other hand, saw a 3.6% increase, reaching its highest point since September.
The e-comics market, particularly within the smartphone ecosystem, has witnessed rapid expansion, with digital manga sales surpassing their paper counterparts, now totaling $3.1 billion annually. Mecha Comics faces competition from various manga apps, including those operated by Line Corp., Kakao Corp., and Nippon Telegraph & Telephone Corp.
Teijin's decision to divest its stake in Infocom aligns with its strategy to streamline operations and focus on long-term growth initiatives. Meanwhile, Blackstone has previously backed Candle Media, a studio led by former Disney executives, while KKR has invested in Skydance Media, led by David Ellison.
Representatives for Sony, Teijin, Blackstone, Integral, and KKR have declined to comment on the ongoing discussions, maintaining confidentiality around the potential acquisition.
In addition to its music operations, Sony Music Entertainment boasts ownership of Aniplex, producer of the anime sensation Demon Slayer, and holds a stake in Crunchyroll, a Japanese anime distributor, through a joint venture with Sony Pictures Entertainment.
Sony's pursuit of Infocom underscores its commitment to diversifying its content offerings and capitalizing on the growing demand for digital entertainment platforms, particularly within the realm of manga and anime.
