According to Reuters, EagleTree Capital is in late stage discussions to acquire popular PC component manufacturer Corsair. The once dominant memory manufacturer successfully expanded into various PC products several years ago. They have alsofound success with catering to the gaming and eSports market. According to sources familiar with the matter, the company is up for more than $500 million USD.
Video game sales topped $30.4 billion last year and the popularity of eSports is difficult to ignore. For people on Wall Street, this all translates to money, money and more money. This makes popular brands such as Corsair a very attractive proposition. The company resists going public until now, remaining under the owner ship of Chief Executive Andy Paul. Initial plans for an IPO in 2013 did not continue after a $75 investment from Francisco Partners.
Corsair’s closest competitor Razer is also considering going public in a few months. Razer however, has the backing of Hong Kong billionaire Li Ka-Shing and Intel Corporation, with a projected valuation worth over $3 billion.
EagleTree will make a roughly 40 percent equity contribution to the purchase price. They are expected to pay nine to 10 times Corsair’s Earnings before interest, tax, depreciation and amortization (EBITDA) of roughly $55 million. This puts the value of the company at around $525 million at the midpoint.
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