K Wave Media Acquires Target for $10.7mln, Boosting Revenues by 25-30%

• K Wave Media acquires target for $10.7mln revenue, 22% CAGR, 12-19% EBIT • Acquisition bolsters creative portfolio, enhances distribution reach, and reinforces financial discipline • Expected to boost KWM's revenue by 25-30% over the next 12 months • Adds VFX, AI-powered advertising, and 3D content creating capacity to KWM's content production • New clients include well-known names with a 14-year relationship with S

Title: K Wave Media Bolsters Creative Portfolio with Strategic Acquisition

K Wave Media (NASDAQ: KWM), a publicly traded media and entertainment company, has announced its first acquisition since going public. The company has secured a 55% controlling stake in Rabbit Walk, a South Korean visual effects and AI-powered advertising studio, for approximately $6.5 million in KWM shares [1]. The acquisition is expected to significantly boost KWM's revenue and expand its capabilities in the creative and technology sectors.

Rabbit Walk, founded in 2010, has a strong reputation for producing high-quality visual effects, AI-powered advertising, and 3D content. The studio has produced over 1,400 commercials and brand films, including high-end demo content for Samsung’s ViewFinity S9 displays and advanced CGI/8K live-streaming productions. Its client base includes major global electronics and media brands, such as Samsung, LG, TCL, and Hisense [1].

The acquisition is projected to increase KWM's revenues by 25-30% over the next 12 months. This growth is expected to be driven by the addition of VFX, AI-powered advertising, and 3D content capabilities to KWM's 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].

The deal 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. This two-stage approach demonstrates KWM's fiscal discipline and aligns incentives with the target's performance [1].

Ted Kim, CEO of K Wave Media, stated, "This acquisition reinforces our commitment to scaling K Wave Media into a world-class content producer and digital asset manager by leveraging the target’s virtual production and generative AI technology. It brings us one step closer to becoming a leader in the Web3 content space and advancing our vision of building one of the first platforms to tokenize IP rights and revolutionize the fandom business" [1].

This strategic move not only enhances KWM's creative portfolio but also expands its distribution reach and reinforces financial discipline. The acquisition is expected to transform KWM from a content producer into a more diversified entertainment technology company with enhanced revenue growth potential.

References:
[1] https://www.stocktitan.net/news/KWM/k-wave-media-accelerates-growth-with-first-acquisition-post-listing-z8d1ksk64xnk.html