Zynga Inc (NASDAQ:ZNGA) is looking to widen its influence in gaming its space, and it aims to do that through its latest acquisition of an Istanbul-based gaming firm called Peak.
The mobile gaming giant wants to double down on its dominance in the mobile gaming space, and the recently announced acquisition deal with Peak highlights its steps towards achieving those goals. The two companies have reportedly reached an acquisition agreement valued at $1.8 billion. Peak will receive $900 million in cash from Zynga and another $900 million worth of Zynga’s common stock.
Peak is also a strong player in the mobile gaming space. Some of its most successful titles include Toon Blast, as well as Toon Blast. The latter has even been on the list of top 10 highest-grossing games on iOS in the U.S for last two years. The two games from Peak have an average of 12 million users every day.
Zynga revealed that it is moving forward with the Peak acquisition on Monday. Its shares rallied by 6% following the announcement, and the two companies expect to finalize the deal in Q3 2020. The acquisition will allow Zynga to expand its portfolio of live services while also potentially increasing its daily active users by roughly 60%. Zynga’s daily active user count was at an average of 21 million users in Q1 2020.
“The acquisition is transformative both because of its size and because of the intangible qualities of Peak Games that ZNGA plans to leverage,” stated Brian Fitzgerald, an analyst at Wells Fargo & Co (NYSE: WFC).
Fitzgerald believes that Peak is the right choice for Zynga based on the fact that the Istanbul-based company tops the list of gaming companies that have a high retention rate thanks to its creative designs. Wells Fargo analysts believe that Zynga has identified opportunities to leverage its data science and product management capabilities through Peak to boost its performance and influence in the mobile gaming space. The acquisition is seen as good move that will help Zynga to put up a strong front in the highly competitive mobile gaming space.