San Francisco based gaming software company called Zynga is reportedly acquiring a majority stake in Finland’s SmallGiant Games which is the maker of the popular Android game Empires & Puzzles. This deal has been valued at$700 million, and is being basically done to strengthen its mobile game portfolio.
This deal marks as the largest one for the gaming company, topping its $527 million acquisition of UK developer Natural Motion in 2014 as stated by Chief Executive Frank Gibeau.
The company is popularly known for Facebook game FarmVille. It also raised its fourth-quarter revenue forecast on Thursday. Its shares rose 1.67% in after-market trading, to $3.65.
Zynga sees potential in bringing smartphone role-playing game Empires & Puzzles to countries in Asia where games of the type are popular, with Gibeau citing Japan, South Korea and China as potential markets.
The 18-month-old game was profitable, making money from in-game purchases plus a small amount of advertising. The acquisition is expected to add to Zynga’s earnings in 2019.
Under Gibeau, who became CEO in 2016, Zynga has tried to revamp its elfas a mobile-focused games maker and is looking for new games to spark growth after a challenging year that saw earnings disappoint. Its shares are down 10percent year-on-year.
The cash-and-stock deal for Small Giant is expected to close on January 1. Zynga said it would buy 80% of privately-held Small Giant now for $560 million and the remaining 20% over the next three years based on profit goals. The implied value of the deal is $700 million, although the final number could vary based on how Small Giant performs.