Zynga to acquire Small Giant Games
Zynga a leading social game developer, has announced it has entered into an agreement to acquire Helsinki-based mobile game studio, Small Giant Games creator of the hit franchise Empires & Puzzles.
Small Giant adds an experienced team and another innovative Forever Franchise to Zynga’s live service portfolio while also expanding its new game pipeline. Small Giant is expected to be accretive to Zynga’s profitability and be a meaningful growth driver in 2019 and beyond.
Founded in 2013, Small Giant is a mobile gaming studio based in Helsinki, Finland that developed the hit franchise Empires & Puzzles. The game successfully blends approachable Match-3 battles with deeper gameplay elements including Hero Collection, Base Building and Social Alliances. Since its launch 18 months ago, Empires & Puzzles has repeatedly broken into the Top 10 Grossing Games on the Google Play Store and Apple App Store. The game has been downloaded over 26 million times and expands Zynga’s international and Android audiences.
“We’ve been impressed by the quality and momentum of Empires & Puzzles as we add another Forever Franchise into Zynga’s portfolio,” said Frank Gibeau, Zynga CEO. “Small Giant has created an innovative game that delivers a unique player experience that engages over the long term. We are excited that Small Giant is joining Zynga as they enhance our next phase of growth.”
“Our studio was founded on the idea that small, skillful teams can accomplish giant things, and I am confident that partnering with Zynga is the right next step in our evolution,” stated Timo Soininen, Small Giant Games CEO. “We will now operate as a separate studio within Zynga, maintaining our identity, culture and creative independence. By leveraging the expertise and support from the wider Zynga team, we will amplify the reach of Empires & Puzzles and the new games in our development pipeline.”
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.