Activision Blizzard acquiring King Digital for $5.9 billion
Activision Blizzard is acquiring King Digital Entertainment plc (creators of the popular mobile game Candy Crush) for $18.00 in cash per share – a total equity value of $5.9 billion.
The $18.00 per share purchase price represents a 20% premium over King’s 30 October 2015 closing price.
The boards of directors of both companies unanimously approved the deal.
Activision Blizzard, known for developing hit games such as World of Warcraft and Call of Duty, believes that the acquisition will help push the company as a leader in interactive entertainment across mobile, console and PC platforms.
The combined company will have a portfolio of some of the top-performing game franchises, including two of the five highest-grossing mobile games in the US (Candy Crush Saga®, Candy Crush Soda Saga™), the most successful console game franchise (Call of Duty®), and the largest personal computing franchise (World of Warcraft®).
King said that it had 474 million monthly active users in the third quarter of 2015 – representing huge market share in the mobile gaming sector.
In the fiscal year ended 30 September 2015, Activision Blizzard reported non-GAAP revenues of $4.7 billion and King reported adjusted revenues of $2.1 billion.
King will operate as an independent unit. Activision expects the King unit to generate over $36 billion in revenue by the end of 2015.
Bobby Kotick, Chief Executive Officer of Activision Blizzard, said, “The combined revenues and profits solidify our position as the largest, most profitable standalone company in interactive entertainment. With a combined global network of more than half a billion monthly active users, our potential to reach audiences around the world on the device of their choosing enables us to deliver great games to even bigger audiences than ever before.”
Kotick, added: “Activision Blizzard will provide King with experience, support and investment to continue to build on their tremendous legacy and reach new potential. We share an unwavering commitment to attracting and developing the best talent in the business, and we are excited about what we will be able to accomplish together.”
Riccardo Zacconi, Chief Executive Officer of King, said, “We are excited to be entering into this Acquisition with Activision Blizzard. Since 2003, we have built one of the largest player networks on mobile and Facebook, with 474 million monthly active users in the third quarter 2015, and our talented team has created some of the most successful mobile game franchises. We believe that the Acquisition will position us very well for the next phase of our company’s evolution and will bring clear benefits to our players and employees.
“We will combine our expertise in mobile and free-to-play with Activision Blizzard’s world-class brands and proven track record of building and sustaining the most successful franchises, to bring the best games in the world to millions of players worldwide. We are very much looking forward to working with Activision Blizzard.
“We have two teams that, together, will have an amazing footprint, innovative technology, and leadership across platforms, and unique, established IPs to delight one of the largest networks of players in the world.”
During the first 9 months of fiscal 2015 M&A deals in the gaming industry fell 74% and the IPO market for the sector was very quiet. This deal completely turns things around.