Zynga announced yesterday morning that it is buying Turkish mobile gaming company Peak in a $1.8 billion deal that ranks as its largest acquisition ever. Zynga will pay close to $900 million in cash and close to $900 million of Zynga common stock for the company; the deal is expected to close in Q3.
Zynga’s agreement will boost annualized revenue by roughly 52% and drive EPS accretion. With 2.7x trailing sales, the deal is a discount to 5.6x multiple and peer Glu Mobile at 3.4x.
The deal is notable not only because of what it’s adding to Zynga today, but also because it highlights history between the two companies. Back in November 2017, Zynga acquired one division of Peak Games, its mobile card games studio, for $100 million in cash.
Strategy
Peak’s Toon Blast and Toy Blast titles have more than 12M daily users combined and high-grossing games in the App Store.
Translation: Zynga doesn’t have to invest money and time into developing a hit-or-miss game, as they’re already hits.
The company realized it doesn’t have to consistently make popular games to offer popular games. It can buy them — and it’s spent nearly $1B on acquisitions since 2017!
This is a huge deal for Turkey’s tech ecosystem.
Turkey has been a steady presence in both the European and MENA, but so far with limited exits and activity extended outside of the region. This acquisition is a testament to the exciting companies and talent that are being developed in Turkey.
Published By
Tate
Originally published at https://www.linkedin.com.
