CONFIRMED: Zynga acquires mobile game developer Peak Games for $1.8b
? Acquisition
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American mobile social game company Zynga Inc. (Nasdaq:ZNGA) has entered into an agreement to acquire Istanbul-based mobile casual games developer Peak Games for $1.8b valuation. The total amount will be paid in cash ($900m) and in the common stock of Zynga ($900m) with the acquisition expected to close in the 3rd quarter of 2020
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As disclosed by Frank Gibeau (CEO of Zynga), Peak Games had around $600m annual revenue and the valuation was based on 3x EV/ Revenue multiple. The acquisition would meaningfully contribute to the EBITDA level. In 2019, Zynga’s EBITDA amounted to $5.7M (EBITDA margin of 0.4%) which shows a significant 89.7% drop compared to 2018 results
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Peak Games has raised over $18m in venture capital up to date. It’s last round Series C was raised in late 2013
? Zynga remains very active in M&As space acquiring Small Giant Games, Gram Games, and NaturalMotion in addition to previous deal with Peak. At the end of 2019 financial year, Zynga had around $1.5b cash on the balance sheet, so Zynga still has around $600m in cash and could still acquire other companies.
? Product
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Peak Games is known for casual puzzle hit games Toon Blast and Toy Blast with the intuitive tap-and-blast game mechanic
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Combined these two games show 12m+ DAU
