Zynga will acquire 80% of Small Giant for $560 million, comprised of approximately $330 million in cash and $230 million of unregistered Zynga common stock (issued at the average closing price per share over the thirty-day trading period ended December 19, 2018). The final upfront transaction consideration will also include customary closing adjustments and will be partially funded by a newly established $200 million revolving credit facility. The transaction is expected to close effective as of January 1, 2019 and Zynga will purchase the remaining 20% of Small Giant over the next three years at valuations based on specified profitability goals.
“Small Giant has created an innovative game that delivers a unique player experience that engages over the long term,” said Zynga CEO Frank Gibeau. “We are excited that Small Giant is joining Zynga as they enhance our next phase of growth.” Over the past two years, Zynga has now spent over $1 billion acquiring mobile game companies including Gram Games and elements of Peak Games.
Zynga has a bright future as an independent company, Gibeau said, without commenting specifically on buyer interest. “We’ve been really focused on scaling and growing,” he said. “We’re completely focused on being on offense.” On his watch, the San Francisco-based company has made acquisitions and introduced frequent updates to its existing titles to build what he calls “forever franchises.” Separately, Zynga lifted its forecast for fourth-quarter revenue and adjusted earnings based on stronger-than-expected holiday sales. Zynga fell 3 percent to $3.56 as of 3:31 p.m. in New York trading Thursday, giving the company a market value of about $3.1 billion.
Zynga, founded in 2007, is the developer of FarmVille, Zynga Poker, Words with Friends and several other mobile games. The company reported revenues of $248.88 million for the quarter ended September 2018, failing to meet analyst estimates. Zynga expects to bring in $243 million in revenue in the fourth quarter of 2018. Moreover, 5mmo.com provides Cheap Zynga Poker Chips for players. As an online in-game currency store for many years, we’ve received great reputation for our reliable service.
