Electronic Arts will acquire Glu Mobile for $2.1 billion in enterprise value. Glu stockholders will receive $12.50 in cash for each share of Glu stock, representing a 36% premium to Glu’s closing share price on February 5, 2021
Glu is a leader developer of mobile games. Their titles include Design Home, Covet Fashion, and MLB Tap Sports Baseball. EA has a large gaming portfolio, including Apex Legends, The Sims, Madden NFL and EA Sports FIFA.
Mobile Gaming is Huge
The tie up scale EA’s mobile gaming business dramatically. Mobile gaming is a major growth sector. According to a recent report by Newzoo senior market analyst Tom Wijman, the mobile gaming will have accounted for $77.2 billion in revenue in 2020. That is an increase of 13% from 2019.
EA CEO Andrew Wilson said, “Mobile continues to grow as the biggest gaming platform in the world, and with the addition of Glu’s games and talent, we’re doubling the size of our mobile business.”
Complementary Portfolios
EA, with it’s hardcore action and sports titles, and Glu, with its casual mobile games, are indeed complementary. Therefore, the combined company will have a diverse base of video gamers.
We’re interested to see how a EA property like The Sims will grow even bigger with Glu on board. Glu and EA both have sports titles. So, there are some synergies already.
EA believes their global licensing and distribution forte will enhance Glu Mobile. Meanwhile, the creative creators and proven leadership teams of both companies is enviable.
Electronic Arts assures investors that all of this will accrete to EA’s total net bookings immediately.
Glu Financial Results
Glu also reported financial results today. Here are the highlights:
- Fourth quarter revenue up 25% year over year to $141.4 million; bookings grow 15% year over year to $124.8 million
- Full year 2020 revenue up 31% to $540.5 million; bookings reach record $560.6 million, up 32% year over year
“Our fourth quarter results capped off another strong year for Glu,” said Nick Earl, Chief Executive Officer. “The performance of our Growth Games and the resurgence of Kim Kardashian: Hollywood coupled with a strong contribution from the title we launched during the year, Disney Sorcerer’s Arena, drove a 32% year over year increase in bookings in 2020. The operating initiatives we put in place to improve productivity and scale our business took hold in the second half of 2020 resulting in a significant increase in profitability and increased margin expansion.”
