UPDATE: Zynga Has Completed The Acquisition Of 80% Of The Shares In Rollic For $180m
? Acquisition
American mobile game developer and publisher Zynga Inc. (Nasdaq: ZNGA) has completed the acquisition of 80% of the shares in of Turkey-based hyper-casual game developer & publisher Rollic for $180m, which is $12m higher than the originally announced purchase price of $168m
That marks the completion of the first part of Zynga’s deal to acquire 100% in Rollic. The remaining 20% of shares will be acquired over the next three (3) years through equal installments, depending on Rollic’s growth and profitability
Rollic maintains its executive and management team, including founder and Chief Executive Officer Burak Vardal, as well as its headquarters in Istanbul, Turkey
The implied EV is $225m, and the estimated valuation multiples are 2.25 EV/Rev and 11.25x EV/EBITDA based on the expected 2020FY results: $100m bookings with ~20% EBITDA margin
? Strategic Rationale
With this deal, Zynga continues to build its Turkish hub of mobile game developers (Peak Games, Gram Games) and enters into the hyper-casual sector, diversifying product portfolio, increasing audience footprint with cross-selling opportunities, and potential profitability improvement (ads revenue typically has higher margins)
Zynga will most probably take some time to integrate recently acquired businesses and prove that it can accelerate synergy at such a large scale
? Products
Rollic is a Turkey-based developer of hyper-casual mobile games with eight (8) of the studio’s titles reaching 1st and 2nd places in the U.S. App Store top free downloaded games
Rollic most recent releases Go Knots 3D and Tangle Master 3D are the top two most downloaded games in the U.S. App Store in Q2 2020
Rollic’s games reported to have over 5m DAU, 65m MAU, and over 365m downloads
The increased interest in mobile games during the Covid-19 pandemic has boosted Rollic downloads growth
? Previous Acquisitions
In July 2020, Zynga purchased Turkey-based mobile casual puzzle games developer Peak Game for approximately $2B as stated in the report (100% shares $952m cash incl. $120m escrow / $1.1B stock)
In January 2019, Zynga has bought Finland-based mobile RPG puzzle game developer Small Giant Games for an implied valuation of $743m (80% shares with $364m cash incl. $30m escrow/ $231m stock + 20% based on profitability goals over the next three years)
In May 2018, the company acquired Turkey-based mobile merge puzzle game developer Gram Games for a total purchase consideration of about $300m (85% shares $255 cash incl. $25m escrow + 15% based on profitability goals over the next three years)
SOURCES: ZYNGA, POCKETGAMER, BUSINESSWIRE
