By Amy-Jo Crowley
LONDON (Reuters) - Carlyle is weighing options for its UK video games maker Jagex, a business which could be valued as high as 1 billion pounds ($1.25 billion), two people familiar with the matter told Reuters.
The U.S. buyout fund is working with advisers at Morgan Stanley and Aream & Co. to explore a sale or a listing of the Cambridge-based studio, which runs the hit fantasy video game RuneScape, the people said.
The process is in the early stages and Carlyle is expected to proceed with an auction process towards the end of the year, the people said.
The sources cautioned a deal is not certain and subject to market conditions, asking not to be identified because the matter is confidential.
Officials from Carlyle declined to comment. Jagex, Morgan Stanley and Aream did not immediately return requests for comment.
Carlyle, which has $376 billion under management, bought Jagex from the U.S. holding firm Macarthur Fortune Holding in January 2021 for a reported $530 million.
Jagex’s annual earnings before interest, tax, depreciation and amortisation (EBITDA) stand at about 60 million pounds and are expected to increase by more than 10% next year, the sources said.
It could fetch up to 15x EBITDA, or between 900 million pounds and 1 billion pounds, in the event of a sale, they added.
Potential buyers are likely to include private equity firms, which could use Jagex as a platform to buy a string of smaller companies within the sector, one source said.
The sale was earlier reported by the Financial Times.
($1 = 0.8021 pounds)
($1 = 0.8021 pounds)