Social-gaming company Zynga has entered into an agreement to buy Peak Games for $1.8 billion, the companies said.
The deal for Peak, a mobile-gaming company based in Istanbul, will include $900 million in cash and approximately $900 million of Zynga common stock based on the volume-weighted average closing price per share over the thirty-day trading period ended May 29, 2020.
The deal is the largest ever start-up acquisition in Turkey and the first valued at more than $1 billion.
“The international stance that Peak has is very complementary to what we’re doing at Zynga,” Zynga chief executive officer Frank Gibeau said in an investor call. “The majority of their business internationally outside the U.S. comes from Japan, which is a strategic mobile market for our company and our industry.”
Zynga said it believes the deal will lead to an increase in revenues of $40 million, to $1.840 billion, for the year. Its mobile daily active users would also increase by more than 60% and enhance its pipeline of new games.
Gibeau said the gaming company was seeing “elevated levels of engagement” and “very nice levels of retention of new cohorts” during the COVID-19 pandemic.
“This is a monumental partnership not only for Zynga and Peak, but for the whole mobile gaming industry,” Peak Games founder and chief executive officer Sidar Sahin said in a statement.
Zynga bought Peak’s mobile card game studio for $100 million in 2017.
“We had and built a deep relationship with the team and the founder, Sidar [Sahin],” Gibeau said. “It was less about the price, it was more about the fit and how he saw the evolution of his team going forward.”
The transaction is expected to close in the third quarter of 2020.
Shares of Zynga were up more than 4% in early-afternoon trading Monday
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