Electronic art (NASDAQ: EA) makes a new push into the mobile gaming sphere with a splashy acquisition. The company announced on Monday that it is buying GluMobile (NASDAQ: GLUU) for $ 2.1 billion in business value.
That price is paid in full cash. Current GluMobile shareholders will receive $ 12.50 each per share, which is 33% higher than Monday’s closing price. After hours, the level is understood understandably enough to be around the purchase price.
GluMobile is a very active developer of mobile games, many of which have been created on the basis of licenses for well-known intellectual property. Among the many titles are Kim Kardashian: Hollywood, MLB Tap Sports Baseball, and Aliens: Unleashed, which are easily accessible on the best mobile app platforms.
In its press release announcing the acquisition, Electronic Arts quoted its CEO Andrew Wilson as saying that it “combines fantastic teams and deeply engaging products to create a mobile game leader with proven expertise in many fast-growing genres.”
The gaming giant added that mobile is the largest gaming platform today; addition of GluMobile will double the size of the stakes in the segment. However, Electronic Arts did not provide estimates for how the inclusion of the new asset could fundamentally affect it.
The acquisition must be approved by GluMobile shareholders, although it is difficult to imagine that they will protest given the share price premium. The agreement must also be approved by the relevant regulatory authorities. Electronic Arts believes the acquisition will close next quarter, ie by 30 June.
Separately, GluMobile reported its fourth quarter earnings on Monday. It is a growing, profitable company – for the quarter, revenues increased by 25% compared to the year to $ 141 million, on bookings which increased by 15%. GAAP net income more than doubled, to $ 23.9 million from Q4 2019’s $ 10.8 million.