Electronic Arts (NASDAQ: EA) is making a new push into the mobile gaming sphere with a spectacular takeover. The company announced Monday that it is acquiring GluMobile (NASDAQ: GLUU) for $ 2.1 billion in company value.
This price will be paid entirely in cash. GluMobile’s current shareholders will receive $ 12.50 each per share, which is 33% higher than Monday’s closing price. After hours, understandably, that level soared to around the purchase price.
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GluMobile is a very active developer of mobile games, many of which are created based on family intellectual property licenses. Among its many titles are Kim Kardashian: Hollywood, MLB Tap Sports Baseballand Aliens: Unleashed, which are available on major mobile application platforms.
In its press release announcing the acquisition, Electronic Arts quoted its CEO Andrew Wilson as “combining incredible teams and deeply engaging products to create a leader in mobile gaming with proven experience in many fast-growing genres”.
The gaming giant added that the cell phone is the biggest gaming platform today; the addition of GluMobile will double the size of your efforts in the segment. Electronic Arts did not, however, provide estimates of how the inclusion of the new asset could impact its fundamentals.
The acquisition is subject to approval by GluMobile shareholders, although it is difficult to imagine that they will object, given the premium on the share price. The business must also obtain approval from the relevant regulatory authorities. Electronic Arts believes the purchase will be completed in the next quarter, that is, on June 30th.
Separately, GluMobile released its fourth quarter earnings on Monday. It is a growing and profitable company – in the quarter, its revenue increased 25% year over year, to US $ 141 million, in reserves that increased by 15%. GAAP net income more than doubled to $ 23.9 million from $ 10.8 million in the fourth quarter of 2019.