EA Acquires is expanding to the mobile gaming space.
EA acquired US-based mobile game developer Glu Mobile. The deal took place for $2.1 billion in enterprise value and $2.4 billion in equity value. The price includes a 36% premium to Glu’s closing share price on February 5th. Glu Mobile has a wide variety of gaming portfolios in the mobile space ranging from sports, casual, RPG, lifestyle, and mid-core genres. The acquisition is scheduled to take place in Q2 of 2021 with cash on hand.
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EA Acquires Glu Mobile to Scale its Mobile Development
Glu Mobile
The deal is looking quite promising for as it will help stabilize its traditionally hit-driven financial performance. The acquisition of Glu Mobile will help to stabilize its revenue stream on a quarter-to-quarter basis. Though the acquisition will increase it’s revenue moderately i.e. 10% it clearly shows the scope of mobile gaming efforts.
Moreover, this acquisition means that will get an add-on of 780 employees. These employees are skilled in mobile development which means that mobile gaming development will scale massively. Both Mobile have a ton of experience in mobile gaming. And combining both forces will cause a great deal of development in the mobile space.
Glu’s financial revenue
Glu’s financial revenue shows steady growth with reported earnings of $540.5 million in 2020. The majority of the earnings are generated in the US via the App Store and Google Play. App Store contributed 56.5% in sales while Google Play added 33% of sales in 2020. Based on Glu’s annual 2020 results, the transaction multiplies are 3.9x EV/Revenue, 71.2x EV/EBITDA, and 27.5x EV/adj. EBITDA.
M&A landscape
This deal is another sign that top guns in the business have already stepped up their approach to Merger & Acquisition. The M&A landscape in the gaming industry is clearly becoming more competitive and a whole lot of big investors are still waiting on the sidelines with their billions. Just a couple of months ago the company entered into an agreement to acquire Codemasters Group for $1.2 billion. It is still expanding and accelerating its M&A approach, will others in the industry follow suit, wait and see.
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Inside Gaming News 24/7 – Reinout te Brake – Games Podcast – Game Consultant – Best Video Gaming News 2021