TOM Online to buy 80% in Indiagames

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China's second largest gaming firm TOM Online has signed a deal to acquire an 80.6 per cent stake in Indiagames, India's largest wireless game developer and global publisher of mobile entertainment, for $17.73 million (approximately Rs 76.24 crore).

The Nasdaq-listed TOM Online has acquired almost 77 per cent of Indiagames' existing equity from investors, including Infinity Ventures, IL&FS Investment Managers and the management team of Indiagames.

Indiagames will issue $4 million worth of fresh shares to TOM Online, taking the latter's stake to 80.6 per cent.

Key management staff, including founder Vishal Gondal, will retain the remaining 19.4 per cent stake in the company and continue to run it.

According to an Indiagames press release, the investment will not only help TOM Online establish its wireless gaming presence in India and China, but also boost its global aspirations.

Founded in 1999, Indiagames has more than 160 employees. Its partners include top-tier Hollywood studios, handset manufacturers and more than 100 distribution channels, including Orange, Verizon, Sprint, Singtel, Airtel and AT&T.

"With TOM Online's popular online platform and expertise in China's local wireless entertainment business, we will have access to a total of more than 1 billion mobile phone users and gain a leadership position in the two largest emerging wireless entertainment markets in the world "" India and China," Gondal, who is also chief executive officer of Indiagames, said.

Indiagames has been making profits for the past two years with a net margin of just under 50 per cent.

TOM Online believes Indiagames will help catapult its integrated Internet products and services on to the world stage, with access to truly global partners and distribution channels, which will be a first for any Chinese portal. This, TOM Online believes, will further enhance its business growth both inside and outside China.