Kunlun Wanwei plans to transfer Grindr for 4.2 billion yuan
On March 6, Beijing Kunlun Wanwei Technology Co., Ltd. (Kunlun Wanwei, 300418) announced that the company held the 70th meeting of the third board of directors and reviewed and approved the “Proposal on Transfer of Equity Interests in Grindr Inc., a Holding Subsidiary” 》, the company and San Vicente Acquisition LLC (hereinafter referred to as “San Vicente” or “Buyer”) reached a preliminary equity transfer intention and intends to transfer Grindr Inc. held by Kunlun Group (Grindr Inc. holds 100% equity of Grindr LLC) 98.59 % Of the equity (Senior management and core employees of Grindr Inc. hold 1.41% of the equity), for approximately RMB 4.215 billion (US$ 608.5 million, finally based on adjusted transaction consideration and audited data) consideration To San Vicente.
After the implementation of this transaction, Kunlun Wanwei will no longer hold the equity of Grindr Inc. and will no longer include it in the scope of the consolidated statement. The company does not provide guarantees or entrust financial management for Grindr Inc.; and Grindr Inc. does not occupy company funds.
According to the announcement, the buyer’s company San Vicente is called San Vicente Acquisition LLC, which was established on February 19, 2020. This company was established exclusively for this transaction. The actual controller is a natural person, all American entrepreneurs and senior investors, and no financial data.
According to Reuters, three sources said that one of the investors in the group’s upcoming deal to acquire Grindr is James Lu (Lu Fubin), a former executive of Chinese search engine giant Baidu. It is not immediately possible to know about the other investors in the acquisition. The identity of the investor.
According to public information, Lu Fubin joined Baidu in 2015 as the vice president and at the same time as the general manager of the Baidu Tieba business department; in December of the same year, he served as the deputy general manager of the MSG business group. In June 2016, he turned to the president of the search company to report to Hailong, in charge of Tieba, Knowledge, Baijiahao, Image Search, Alliance Development Department and some investment companies. In May 2017, Lu Fubin resigned from Baidu.
However, Lu Fubin has not yet responded to this.
It is worth noting that according to Reuters, Kunlun Wanwei’s control of Grindr has caused concerns among US privacy advocates. In 2018, U.S. Democratic Senators Edward Markey and Richard Blumenthal sent a letter to Grindr, asking the other party to answer, as an App belonging to China, how does the App protect the privacy of users.
Grindr Inc. was established on May 10, 2018, with its registered address in Wilmington, Delaware, USA. It is engaged in the operation of a social network platform for LGBTQ groups. It is one of the largest LGBTQ+ social platforms in the world. Active users are mainly distributed in Developed countries and regions such as Europe and America.
Kunlun Wanwei acquired Grindr Inc. within four years, and made a profit of RMB 3.164 billion.
Kunlun Wanwei stated in the announcement that this transaction is expected to generate investment income of approximately RMB 3.164 billion (the adjusted transaction consideration and audited data shall prevail). In addition, this transaction can generate considerable cash backflow, which is conducive to enriching the company’s cash reserves, providing strong financial support for the continuous growth of existing businesses, creating greater value for shareholders, and conforming to the company’s long-term development plan, and in line with all shareholders and shareholders. company’s profit.
The proceeds from the equity transfer will be used to supplement liquidity and business investment in the company’s new strategy. The company will continue to practice the development strategy of investing in Internet AI based on its core Internet business.
As early as 2016, Grindr LLC was included in the consolidation scope of Kunlun Wanwei’s financial statements.
On January 8, 2016, Beijing Kunlun Wanwei Technology Co., Ltd. purchased New Grindr LLC (now renamed “Grindr LLC”) with its wholly-owned subsidiary Kunlun Group Co., Ltd. (hereinafter referred to as “Kunlun Group”) as the main investor The existing shareholder Grindr Holding Company holds 98,448,000 shares, with a total investment of approximately US$93 million. The transaction completed the equity delivery procedures in March 2016. After the completion of the acquisition, Kunlun Group held 61.53% of Grindr LLC. Grindr LLC was included in the company’s financial statement consolidation scope in April 2016.
In 2017, Kunlun Group held 100% of Grindr LLC.
On May 22, 2017, Kunlun Wanwei decided to use Kunlun Group as the mainstay to invest US$152 million to acquire a 38.47% stake in Grindr LLC held by Grindr LLC shareholder Grindr Holding Company. The transaction completed the equity delivery procedures in January 2018. After the completion of the acquisition, Kunlun Group holds 100% of Grindr LLC.
On May 9, 2019, Kunlun Wanwei, Grindr LLC and the U.S. government represented by the Ministry of Treasury and the Department of Justice signed the National Security Agreement. The entity sold its 100% equity interest in Grindr LLC.
Official information shows that Kunlun Wanwei is a comprehensive Internet group established in 2008. Globally, a social media and content platform composed of four business sectors including the mobile game platform (GameArk), leisure and entertainment social platform (Xianlai Mutual Entertainment), social platform (Grindr), and information information (Opera) has been formed. It was listed on the Shenzhen Stock Exchange on January 21, 2015, and raised capital of RMB 1.421 billion.