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South Korea’s DoubleU Games is expected to use around 80% of the proceeds raised from the listing of its subsidiary DoubleDown Interactive (DDI) to mergers and acquisitons (M&As).

DoubleU Games is expected to raise around 108 billion won ($94 million) by offering American Depositary Receipts (ADRs) at $18, which is the bottom of the price range, according to the company on Thursday. The proceeds will increase to 120 billion won if it sells ADRs at $20, the top of the price range.

The company expects to earn around 98.4 billion won from the initial public offering (IPO) after deducting listing costs and fees to underwriters. DDI has allocated 80 billion won, or 81%, of the total to acquisitions other companies.

DoubleU Games’ M&A push is a move to achieve economies of scale in the social casino industry where marketing and competition is fierce. The company can reduce marketing costs per unit and enhance price competitiveness if it has a large user pool.

DoubleU Games itself has grown into a global company through a large-scale M&A. DoubleU Games acquired DDI for 942.5 billion won in 2017. DDI’s DoubleDown Casino was the biggest social casino app on Apple App Store.

By taking over DDI, DoubleU Games has grown into a game company with a global market share of 10.8% and has become the world’s second largest social casino game company.

The social casino industry has experienced heated competition over the past two to three years, which has made DoubleU Games improve its poor cost structure due to intensifying marketing competition. DoubleU Games has believed M&As as a solution to overcome the current situation.

Market insiders are paying attention whether another mega M&A will be carried out again, given DDI’s financial soundness. DDI stably recorded operating profits of 60 billion won to 100 billion won since 2018. Its operating profit margin has been maintained at a 20% level. The company is capable of raising a large amount of money as its operating cash flow reached nearly 100 billion won during the same period. (Reporting by Sang-woo Seong)