K Wave Media (NASDAQ:KWM) announced Monday the formal closing of its control acquisition of Rabbit Walk, a South Korea-based studio at the intersection of visual effects (VFX), artificial intelligence, and 3D content production.
The deal marks K Wave’s first major acquisition since its 2025 Nasdaq listing and is expected to pivot the company toward high-margin, technology-led content creation.
The transaction structure emphasizes performance and financial discipline.
K Wave initially acquired a 55% stake by issuing 2,633,753 ordinary shares at a fixed price of $2.50 per share.
To secure the remaining 45% ownership, the company has set a profitability hurdle: Rabbit Walk must post an operating profit exceeding ₩1.2 billion (approximately $800,000) in either the 2025 or 2026 fiscal years.
If achieved, K Wave will issue up to 3 million additional shares to complete the buyout.
Rabbit Walk enters the K Wave portfolio with an impressive track record, boasting a 22% compound annual growth rate (CAGR) from 2020 to 2025.
Last year, the studio generated $11.7 million in revenue with historical EBIT margins ranging from 8% to 19%.
Its blue-chip client roster includes a 14-year partnership with Samsung Electronics, alongside LG Electronics, TCL, and Hisense.
K Wave management expects the deal to be immediately accretive, projecting that Rabbit Walk will contribute approximately $15 million in revenue and $1.5 million in EBITDA for 2026.
On a consolidated basis, K Wave anticipates its total revenue will increase by 25% to 30% over the next 12 months.