K Wave Media Acquires Visual Effects and AI-Powered Advertising Company, Boosting Revenues by 25-30%

K Wave Media has acquired Rabbit Walk, a visual effects and AI-powered advertising company, to boost its revenues by 25-30% over the next 12 months. The acquisition adds VFX, AI-powered advertising, and 3D content capabilities for global clients including Samsung, LG, TCL, and Hisense. K Wave Media's revenue is expected to rise with this acquisition, and the company aims to become a leader in the Web3 content space and tokenize IP rights.

K Wave Media (NASDAQ: KWM), a publicly traded media and entertainment company, has announced its first post-NASDAQ listing acquisition by securing a 55% controlling stake in Rabbit Walk, a South Korean visual effects and AI-powered advertising studio. The acquisition, valued at approximately $6.5 million in KWM shares, is set to significantly boost KWM's revenues by 25-30% over the next 12 months [1].

Rabbit Walk, founded in 2010, has a strong reputation for producing high-quality visual effects, AI-powered advertising, and 3D content. The studio has worked with prestigious clients such as Samsung, LG, TCL, and Hisense, producing over 1,400 commercials and brand films. The acquisition includes a performance-based contingency of an additional $6.5 million in equity if Rabbit Walk achieves operating profit exceeding ₩1.2 billion (~$800,000) in either 2025 or 2026 [1].

The acquisition is projected to increase KWM's revenues by 25-30% over the next 12 months, adding VFX, AI-powered advertising, and 3D content capabilities to its portfolio. Rabbit Walk recorded $10.7 million in revenue in 2024 with a 22% CAGR during 2020-2024, while KWM's 2024 revenue was $58 million [1].

KWM's acquisition of Rabbit Walk brings strategic advantages, including expanded technical capabilities in AI, VFX, and 3D content, entry into the high-value electronics sector, and enhanced positioning for KWM's stated Web3/tokenization ambitions. The performance-contingent structure limits dilution risk while creating aligned incentives, and the all-equity transaction preserves KWM's capital position [1].

This acquisition transforms KWM from a content producer into a more diversified entertainment technology company with enhanced revenue growth potential. The deal structure demonstrates fiscal discipline through its two-stage approach: an initial 55% controlling stake valued at $6.5 million, followed by a contingent $6.5 million payment tied specifically to Rabbit Walk achieving $800,000 in operating profit [1].

The financial metrics are particularly promising. Rabbit Walk's $10.7 million revenue with a 22% CAGR (2020-2024) will meaningfully impact KWM's $58 million base revenue. The projected 25-30% revenue increase represents an excellent growth accelerator for a newly public company, while the target's 12-19% EBIT margins indicate healthy operational efficiency [1].

Beyond financials, this acquisition delivers three strategic advantages: 1) Expanded technical capabilities in AI, VFX, and 3D content, 2) Entry into the high-value electronics sector through relationships with Samsung, LG, TCL, and Hisense, and 3) Enhanced positioning for KWM's stated Web3/tokenization ambitions through Rabbit Walk's virtual production and generative AI expertise [1].

The acquisition is expected to boost K Wave Media’s revenues by 25–30% over the next 12 months, while adding VFX, AI-powered advertising, and 3D content capabilities for global clients, including Samsung, LG, TCL, and Hisense [2].

References:
[1] https://www.stocktitan.net/news/KWM/k-wave-media-accelerates-growth-with-first-acquisition-post-listing-z8d1ksk64xnk.html
[2] https://www.marketscreener.com/news/k-wave-media-accelerates-growth-with-first-acquisition-post-listing-a-visual-effects-and-ai-powered-ce7c50d3df89f426