For the gaming industry, 2022 has started off with a bang
Take-Two Interactive just announced a deal to acquire mobile game company, Zynga for $12.7 billion.
Take-Two (NASDAQ: TTWO) will acquire all outstanding shares of Zynga (NASDAQ: ZNGA) for $9.86 per share, a massive 64% premium over Friday’s closing price of $6.00. The deal will pay Zynga shareholders $6.36 in TTWO stock and $3.50 in cash for every share of ZNGA held.
The deal, the largest in video game history, dwarfs recent deals such as Microsoft’s purchase of Bethesda for $7.5 billion and Tencent’s $8.75 billion majority-stake acquisition of Supercell.
Last year marked the biggest year in the video game industry for M&A activity, direct investment, SPACs, and IPOs.
But already this year, one $225 million SPAC (PowerUp Acquisitions) was announced, and the largest ever gaming company acquisition has occurred. This, just 10 days into January.
The industry remains one of the hottest sectors for investors, globally.
On CNBC this morning (Jan. 10), Strauss Zelnick, CEO of Take-Two said, “we are trying to build a business over a very long period of time. We’ve paid attention to creating value for our players, for our colleagues, and for our shareholders and that’s worked out over a very long period of time.”
With the mobile video game industry alone expected to expand at a compound annual growth rate (CAGR) of 14% through 2030, it’s no wonder why large players like Take-Two are on an acquisition spree.
Nearly any attractive asset, public or private, could be targeted, as “growth by acquisition” has become a go-to strategy for the big-boys.
Investors in smaller publishers, developers and game-tech companies could be huge winners if acquired, especially if acquired at a huge premium, like the 64% over-market value paid to Zynga shareholders.
Read more about the Take-Two acquisition of Zynga, HERE
Or discover potential acquisition targets, HERE