Take-Two Interactive to Acquire Mobile Gaming giant Zynga in $12.7B Deal
Take-Two, led by chairman and CEO Strauss Zelnick, will buy all of Zynga’s outstanding shares in a cash and stock transaction valued at $9.861 per Zynga share, based on Friday’s market close, “for a total enterprise value of roughly $12.7 billion,” according to the company. According to the firms, the purchase price is a 64 percent premium to Zynga’s Friday closing share price.
Grand Theft Auto, Red Dead Redemption, NBA 2K, BioShock, Borderlands, Civilization, and Mafia are among Take-most Two’s popular gaming franchises, while Zynga’s portfolio includes CSR Racing, Empires & Puzzles, FarmVille, Golf Rival, Harry Potter: Puzzles & Spells, Words With Friends, and Zynga Poker.
Take-“huge Two’s catalog of financially and critically acclaimed console and PC products with engaged and loyal communities of players” will give it “a major chance to produce mobile games and innovative cross-platform experiences for many of these assets,” according to the company.
They said the deal will bring together “two global leaders in the interactive entertainment business and establishes Take-Two as one of the largest and most diversified mobile game publishers in the industry, with $6.1 billion in Pro-forma net bookings for the trailing 12-month period ended Sept. 30,” calling it a “transformative combination.”
The acquisition is expected to close during the quarter ending June 30 and is subject to stockholder and regulatory approvals from both firms.
“We are thrilled to announce our transformative transaction with Zynga, which significantly diversifies our business and establishes our leadership position in mobile, the fastest-growing segment of the interactive entertainment industry,” said Zelnick. “This strategic combination brings together our best-in-class console and PC franchises, with a market-leading, diversified mobile publishing platform that has a rich history of innovation and creativity. Zynga also has a highly talented and deeply experienced team, and we look forward to welcoming them into the Take-Two family in the coming months.”
He added: “As we combine our complementary businesses and operate at a much larger scale, we believe that we will deliver significant value to both sets of stockholders, including $100 million of annual cost synergies within the first two years post-closing and at least $500 million of annual net bookings opportunities over time.”
“Combining Zynga’s expertise in mobile and next-generation platforms with Take-best-in-class Two’s capabilities and intellectual property will enable us to further our mission to connect the world through games while achieving significant growth and synergies together,” said Frank Gibeau, CEO of Zynga.
Take-Two said Gibeau and Bernard Kim, Zynga’s president of publishing, will “drive the strategic direction for Take-mobile Two’s efforts” and “oversee the integration and day-to-day operations of the combined Zynga and T2 Mobile Games business, which will operate under the Zynga brand as its own label within the company.”
Take-financial Two’s advisors are J.P. Morgan and LionTree Advisors, with legal guidance provided by Willkie Farr & Gallagher. Zynga’s financial advisor is Goldman Sachs, and its legal counsel is Wilson Sonsini Goodrich & Rosati, Professional Corp.
