Back to top

Image: Bigstock

Take-Two Interactive (TTWO) to Acquire Zynga in a Landmark Deal

Read MoreHide Full Article

Take-Two Interactive (TTWO - Free Report) is set to acquire all of the outstanding shares of Zynga . The acquisition, as announced, is a cash and stock deal, implying an enterprise of $12.7 billion.

The transaction represents a 64% premium to Zynga’s closing share price of $6, as of Jan 7.

The Zynga acquisition, once completed, will establish Take-Two Interactive as one of the largest publishers of mobile games in the lucrative and fast-growing industry of interactive entertainment. The deal would unify Take Two’s top-class portfolio of PC and console games and Zynga’s leading mobile franchises.

The strategic acquisition is anticipated to close during first-quarter fiscal 2023, ending on June 30, 2022.

Game Portfolio Expansion Drives the Top Line

Take-Two has been benefitting from strength in product introductions, live services and robust growth in the international market.

In second-quarter fiscal 2022, Take-Two Interactive reported net revenues of $858.2 million, up 2% year over year.

NBA 2K22 and NBA 2K21, Grand Theft Auto Online and Grand Theft Auto V, Red Dead Redemption 2 and Red Dead Online, Borderlands 3, Two Dots, Sid Meier’s Civilization VI and Dragon City were the biggest contributors to the company’s second-quarter fiscal 2022 top line.

Take-Two Interactive has been focused on expanding its game portfolio in recent times.

Recently, the company announced that its subsidiaries, Private Division and Roll7, would launch the game OlliOlli World for PlayStation 5 and PlayStation4, the Xbox Series X|S and Xbox One consoles, PC via Steam and Nintendo Switch console, on Feb 8, and can be pre-ordered.

In September 2021, Take-Two Interactive launched the next iteration of its top-rated NBA video game simulation series, NBA 2K22. The game is currently available on current and new-generation platforms worldwide.

Earlier in 2021, the company had launched the expansion of its single-player RPG, The Outer Worlds: Murder on Eridanos. The game is currently available for PlayStation 4, PlayStation 4 Pro, Xbox One consoles and Windows PC. Later, it will be launched on the Nintendo Switch.

The launch of these games is anticipated to drive user growth.

 

 

Acquisitions Driving Growth

The acquisition of game-developing companies by Take-Two Interactive contributes to its expanding portfolio that helps in attracting gamers.

Recently, Take-Two Interactive acquired Paltygobian, S.L, known as elite3d. Around the same time, the company acquired Valencia-based game development studio Turia Games, S.L, co-owned by the founders of elite3d.

The acquisitions would help Take-Two Interactive expand its global footprint and support its expanding product portfolio.

In 2021, Take-Two Interactive also acquired a mobile game developing company, Nordeus.

The acquisition of Nordeus is a strategic move by the company to bolster its mobile business along with its previous acquisitions of Playdots and Social Point in 2020 and 2017, respectively.

Around the same time, TTWO also acquired the privately-held video-based facial animation services company Dynamixyz.

The Dynamixyz acquisition is anticipated to help the company invest more in its internal development capabilities and create more efficient entertainment gaming solutions.

Strong Content to Steer Past Competition

Despite stiff competition from the likes of Electronic Arts (EA - Free Report) and Activision Blizzard , this presently Zacks Rank #3 (Hold) company is likely to sustain its growth momentum on the back of strong content. You can see the complete list of today’s Zacks #1 Rank stocks here.

Take-Two Interactive’s shares have declined 28.2% year to date compared with the Zacks Toys - Games - Hobbies industry’s fall of 16.9%. TTWO has underperformed Electronic Arts’ price performance but outperformed Activision Blizzard.

In the trailing 12-month period, Electronic Art’s shares have declined 7.3% compared with Activision’s decline of 29.3%.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Take-Two Interactive Software, Inc. (TTWO) - free report >>

Electronic Arts Inc. (EA) - free report >>

Published in