Zynga to buy Peak for $1.8bn

August 2020 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

August 2020 Issue

In what is its biggest acquisition in its 13-year history, social gaming company Zynga is to buy global online and mobile gaming firm Peak Games in a transaction valued at $1.8bn.

The definitive agreement will see Zynga acquire 100 percent of Peak – comprising approximately $900m in cash and approximately $900m of Zynga common stock. Furthermore, Zynga will acquire Peak’s two Forever Franchises – Toon Blast and Toy Blast – that have consistently ranked in the top 10 and top 20 US iPhone grossing games for over two years, respectively.

Collectively, Toon Blast and Toy Blast have more than 12 million average mobile daily active users (DAUs). Their acquisition is expected to grow Zynga’s average mobile DAUs by more than 60 percent, while strengthening its international audience. Moreover, the franchises add significant scale to Zynga’s live services and will be an additional driver of margin expansion over the coming years.

The acquisition of Peak is also expected to enhance San Francisco-based Zynga’s new game pipeline, with additional projects in early development.

Founded in 2007, Zynga is a global leader in interactive entertainment. Its games are available in more than 150 countries and are playable across social platforms and mobile devices worldwide. The company is headquartered in San Francisco with locations in the US, Canada, the UK, Ireland, India, Turkey and Finland.

Zynga’s acquisition of Peak is the latest example of the accelerating pace of M&A in Silicon Valley, as tech companies aim to take advantage of market turmoil during the coronavirus (COVID-19) crisis. Peak is the fourth Turkish company to have been bought by a foreign owner in the last five years. It is also the second to have been purchased by Zynga, which acquired Gram Games for $250m in 2018.

“We are honoured to welcome Sidar and team to Zynga,” said Frank Gibeau, chief executive of Zynga. “Peak is one of the world’s best puzzle game makers and we could not be more excited to add such creative and passionate talent to our company. With the addition of Toon Blast and Toy Blast, we are expanding our live services portfolio to eight forever franchises, meaningfully increasing our global audience base and adding to our exciting new game pipeline.”

Founded in 2010 and with a 100-person strong team, Istanbul-based Peak is known for its innovation, creativity and exquisite design – popularising the ‘collapse’ mechanic within match-3 puzzle games – and have captured a highly engaged global audience base that ranks among the industry’s best in player retention.

“This is a monumental partnership not only for Zynga and Peak, but for the whole mobile gaming industry,” said Sidar Sahin, founder and chief executive of Peak. “Both companies share a common vision – to bring people together through games. Peak’s culture is rooted in relentless learning and progress, so as we embark on this new chapter in our journey together with Zynga, we remain as committed as ever to our unique culture. We are very excited for our combined future and what we will accomplish together.”

The transaction is expected to complete in the third quarter of 2020.

Mr Gibeau concluded: “As a combined team, Zynga and Peak are well-positioned to grow faster together.”

Fraser Tennant