Local OTT Watcha Acquired by Kinolights for 4.25 Billion Won

Homegrown online video service (OTT) Watcha is being acquired by content company Kinolights.

According to the industry on the 13th, Kinolights has practically been finalized as the prospective buyer for Watcha, which is currently undergoing rehabilitation procedures at the Seoul Bankruptcy Court.

This merger and acquisition (M&A) was conducted through a "stalking-horse" method. The stalking-horse approach involves selecting a prospective buyer in advance and then allowing them to compete with any other bidder who offers a higher price.

Kinolights was selected as the prospective buyer in the middle of this year and signed a conditional investment agreement. With no other bidders appearing in the subsequent public bidding, it was finalized as the ultimate buyer. The acquisition price is known to be 4.25 billion won.

Kinolights operates a content recommendation platform and recently expanded its business domain into intellectual property (IP) for films.

Launched in 2011, Watcha pioneered the domestic content streaming market. In the early days of its service, it gained positive responses through its user data-based content recommendation system.

Furthermore, although it led the market by securing content such as the globally popular HBO series "Game of Thrones," it fell behind in the competition as global streaming platforms armed with their own original content, such as Netflix and Disney+, landed in South Korea, alongside local rivals like CJ ENM, KT, and JoongAng Group's TVING, and the terrestrial broadcaster-backed Wavve.

Accumulating long-term deficits, Watcha entered court-led rehabilitation procedures in July of last year upon the application of some convertible bond (CB) investors, and has since been undergoing a public sale process.

(Photo: Yonhap News / Reported by Kim Ji-hye, SBS Entertainment News)
※ Please note: This article was translated by AI and may contain errors.