Dublin mobile gaming company Upstart Games has been bought by Chinese Sun 3C Media for €11.5 million and plans to target that market's 420 million mobile phone owners within months.
Upstart chief executive Barry O'Neill said the company, which will remain a separate entity, plans to enter the Chinese market with games and new products including mobile magazines. "We will probably start launching products in China within two to three months," he said.
Mr O'Neill hopes to translate the television fame of new shareholder Yang Lan, known as China's Oprah Winfrey, into a successful online mobile magazine.
AIM-quoted Sun 3C is part of the Sun Media Investment group controlled by Yang Lan, whose website has more than 50 million users, and her husband Bruno Wu, a successful Chinese entrepreneur.
"We felt that creating the most long-term value would come from entering into a venture with such big potential," said Mr O'Neill, who assumes the post of chief operating officer at Sun 3C.
He said Upstart had 12 acquisition approaches in the past two years, including three while it was talking to Sun 3C.
Set up in 2003, Upstart supplies premium mobile games to network operators around the world. It has developed a technology platform that enables games to be configured to suit different phones, and has worked with Japanese mobile games developers including Sony Computer Entertainment, Konami and G-Mode.
Sun 3C will pay £7.85 million (€11.61 million) for the company, of which £500,000 will be paid up front and £1.35 million in four equal quarterly payments within a year. The balance will be paid through allotting 30 million new shares in Sun 3C at 20p each. Ten million of these shares will be held in escrow pending the execution of certain performance criteria.
Sun 3C will also invest £500,000 to finance Upstart's expansion in China and other international markets. Upstart, which made a pretax loss of €170,192 last year on turnover of €2 million, is establishing an office in Los Angeles and plans to open offices in Beijing and Shanghai. It will continue to carry out research and development in Dublin.
Shareholders in line to benefit from the sale include restaurant and bar owners Eoin Foyle and Jay Bourke. Upstart raised friends and family funding of just under €500,000 between December 2003 and January 2004. Enterprise Ireland also invested in the company.
In March this year, Upstart pulled in fresh angel investors including Dublin businessman Tom Jones, whose retail interests range from the delicatessen business to a stake in the Paco Life in Colour clothing chain.
