? Acquisition
- US-based video game company Take-Two Interactive Software, Inc. (NASDAQ:TTWO) has acquired 94.5% of Serbia-based mobile game developer Nordeus for up to $378m, including:
- $225m upfront, paid $135m in cash and $90m in newly issued Take-Two shares (the number of shares calculated by dividing $90m by the weighted average closing price per share on the Nasdaq Global Select Market during the thirty trading day period ending on the second trading day prior to the closing date)
- $153m earn-out if certain undisclosed EBITDA thresholds are reached during each of the two years
- The Nordeus founding team will continue to run the company with Nordeus CEO Branko Milutinović reporting to Take-Two’s head of mobile Nir Efrat
? Story Behind
- Take-Two has kept an eye on Nordeus since 2014 when the company first got interested in mobile. Michael Worosz, Take-Two’s executive vice president stated that it was Horacio Martos, the CEO of Socialpoint (a mobile game developer acquired by T2 in 2017), who made the deal possible by introducing Branko Milutinović
? Strategic Rationale
- During the 2021-2025 period, Take-Two plans to release 21 games. We don’t know much about the titles, but we can presume that some of them are for the mobile platform. Furthermore, the acquisition of Nordeus will bolster Take-Two’s mobile business and provide more resources to stick to the pipeline
- Take-Two gets to expand its operations into Eastern Europe, which has recently begun gaining attention from many game developers. Nordeus, on the other hand, can gain access to North America through the acquisition, which would be a great aid in their endeavor to “put Serbia on the global map of gaming”
- With the acquisition, Take-Two not only continues its expansion to the mobile business but also broadens its sports portfolio with the first football-related title – Top Eleven. Moreover, leveraging Take-Two’s expertise in publishing and live operations, Nordeus can potentially improve its financial performance over the next few years
? Product
- Founded in 2010, Nordeus is a mobile game developer, known for the world’s most successful mobile soccer management game Top Eleven. The studio also argues that Top Eleven is the world’s first truly cross-platform game since it was initially launched on Facebook and later on mobile
- Being the longest-lasting soccer franchise (10 years), Top Eleven remains Nordeus’ bestseller with 240 million registered users and around 78 million downloads over the years. The downloads peaked in June 2016 when they reached 2.1 million
- In July 2019, Nordeus launched a mobile strategy battle game Heroic – Magic Duel which has been downloaded more than 3.8 million times
? Previous M&A
- Take-Two is set to further expand its influence in the mobile gaming market. In the past, they already made two acquisitions, buying Socialpoint in 2017 and Playdots in 2020
- Nordeus is Take-Two’s fifth acquisition in under 12 months, and that’s despite having EA outbid their deal with Codemasters last year
Sources: Take-Two
Written by Andrei Zubov
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