Zynga (NASDAQ:ZNGA) is beefing up its gaming business with the acquisition of Istanbul-based unicorn startup Peak Games.
According to a Zynga news release, the company is picking up Peak Games for a total of $1.8 billion. That may seem like a high price, but the company notes that the unicorn startup frequently has apps in the top 10 and top 20 rankings for iPhones in the U.S.
The deal between the two companies has Zynga bringing on the 100 employees of the game developer with it. It also includes the company’s two biggest franchises, Toon Blast and Toy Blast.
Zynga isn’t spending a full $1.8 billion on unicorn startup Peak Games. Instead, the company is paying out $900 million in cash for the mobile game developer. The remaining $900 million comes in the form of ZNGA common stock.
Frank Gibeau, CO of Zynga, said this about the deal with Peak Games.
“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. As a combined team, we are well positioned to grow faster together.”
Zynga and Peak Games are expecting the deal to close during the third quarter of 2020. The company notes that the final price of the deal may change to include customary closing adjustments.
ZNGA stock was up 5.6% when markets closed on Monday. The stock was also up close to 1% in after-hours trading.
As of this writing, William White did not hold a position in any of the aforementioned securities.