UPDATE: Zynga Has Completed The Acquisition Of 80% Of The Shares In Rollic For $180m
💵 Acquisition
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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
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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
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Rollic maintains its executive and management team, including founder and Chief Executive Officer Burak Vardal, as well as its headquarters in Istanbul, Turkey
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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
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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)
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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
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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
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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
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Rollic’s games reported to have over 5m DAU, 65m MAU, and over 365m downloads
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The increased interest in mobile games during the Covid-19 pandemic has boosted Rollic downloads growth
💵 Previous Acquisitions
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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)
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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)
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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
