Zynga to acquire mobile games giant Peak for $1.8bn
Social games developer Zynga has agreed a deal to acquire Peak, the mobile gaming business behind the Toon Blast and Toy Blast game franchises, for $1.8bn (£1.45bn/€1.62bn).
Zynga will acquire 100% of Peak, with the purchase price to be comprised of $900m in cash and $900m in Zynga’s common stock. Subject to customary closing adjustments, the transaction is expected to close in the third quarter.
According to Zynga, the acquisition will add significant scale to its live services, as well as strengthen new game pipeline with additional projects in early development.
The transaction comes after Zynga acquired Peak's card games studio in a $100m deal in 2017.
“Peak is one of the world’s best puzzle game makers and we could not be more excited to add such creative and passionate talent to our company,” Zynga’s chief executive Frank Gibeau said.
“With the addition of Toon Blast and Toy Blast, we are expanding our live services portfolio to eight forever franchises, meaningfully increasing our global audience base and adding to our exciting new game pipeline. As a combined team, we are well positioned to grow faster together.”
Peak’s founder and chief executive Sidar Sahin added: “This is a monumental partnership not only for Zynga and Peak, but for the whole mobile gaming industry. Both companies share a common vision -- to bring people together through games.
“Peak’s culture is rooted in relentless learning and progress, so as we embark on this new chapter in our journey together with Zynga, we remain as committed as ever to our unique culture.”
Meanwhile, Zynga has updated its financial guidance for the second quarter and full year, saying that the strengths across its live services portfolio means it now expects to achieve better than expected results.
Zynga had initially stated that reconciliation of revenue to bookings in its second quarter would amount to $460m, but has now upped its estimate to $500m for the three-month period.
Net loss for the three months ended 30 June is now expected to total $160m, up $100m from the initial estimate of $60m, but adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) is set to be higher at $35m compared to $32m.
In terms of how these increases will impact its full year performance, Zynga said reconciliation of revenue to bookings is now likely to total $1.84bn, up from $1.8bn.
The business' 2020 net loss is likely to amount to $350m, up from the original estimate of $245m, while adjusted EBITDA is expected to total $223m, compared to the $210m that Zynga had originally forecast.
Zynga noted that the update did not include any contributions from Peak, as the transaction is not expected to close until the third quarter.