The maker of Candy Crush Saga, King, is gearing up to debut on the New York Stock Exchange tomorrow with a target market valuation of $US7.6 billion.
It’s expected to result in a big payday for King employees and investors, except for one, The Wall Street Journal reports.
That investor is named Mike Chalfen.
Back in 2005, Chalfen led a $US40 million investment in King on behalf of London-based Apax Partners LLP. Chalfen left the next year, only a few months before he would have received a share of the firm’s profit from the deal, known as carried interest.
Today, Apax owns roughly half of the maker of Candy Crush Saga. That stake is valued at $US3.5 billion, but Chalfen won’t see any of that.
“I’m not going to make a penny,” Chalfen told The Wall Street Journal.
That’s because private-equity partners don’t typically see their share of carried interest in deals unless they stick around with the firm for enough time. Chalfen simply left too soon.
But Chalfen isn’t too bothered by this.
“[Apax] was becoming focused totally on buyouts and I wanted to do something else,” he told the WSJ. “Apax is a fantastic firm and was a great place for me to learn the business.”
For what it’s worth, Chalfen will see some money from the sale since he was one of the Apax employees who invested in the firm’s €4.3 billion fund it raised in 2005. But it won’t be nearly as much as what he would have received had he stuck around Apax for longer.
We’ll be watching King’s market debut tomorrow closely, especially given that a major red flag for King’s IPO is that its revenues are built on one game. That game is Candy Crush Saga, and even that is in decline.
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