The privatization of online LGBTQ platform BlueCity is nearing completion. Metaclass Management ELP, a fund owned by Chinese social networking product developer Newborn Town, will become its actual controller.
On July 29, BlueCity announced that the proposal to authorize and approve the previously announced agreement and merger plan was approved by approximately 95.7% of the total votes cast. The merger would result in the company becoming a private company.
According to the announcement issued by BlueCity last month, the merger is expected to be completed within 10 working days. The buyer group includes Metaclass Management ELP, BlueCity’s founder Ma Baoli, and CDH Investment. Among them, Metaclass Management ELP is funded by Chinese social networking product developer Newborn Town. Newborn Town will become the actual controlling shareholder of the private company after the deal.
According to the agreement, BlueCity will be acquired at the price of $3.20/share or $1.60/ADS, and the transaction valuation is about $60 million. BlueCity’s operating income in 2021 is $169 million, which means that this is a cost-effective acquisition.
Newborn Town has created Yumy, MICO, YoHo and other international social products, covering the Middle East, Southeast Asia, North America, Europe, Japan, South Korea and other markets. BlueCity was established in 2011 and was listed on the Nasdaq in June 2020. At that time, its issue price was $16 and $84.8 million was raised. Its market value at the time of listing exceeded $600 million.
At present, BlueCity is the largest LGBTQ social company in China, and has been exploring overseas markets for many years, with 40% overseas users. The acquisition of BlueCity will help Newborn Town quickly cut into the huge LGBTQ social market.
According to Frost & Sullivan, it is estimated that by 2023, the number of global LGBTQ groups will increase to 591 million, and the global LGBTQ market will reach $5.4 trillion.
At present, many overseas social applications have gradually entered the LGBTQ social sector. Social apps such as Tinder, Bumble and Hinge all support choosing same-sex preferences. Match Group, the US open social giant, acquired GROWLr, a gay dating application, in 2019 to seize a substantial share of the LGBTQ market.