NEWS Information Technology        01/06/2020

Zynga to buy Turkish mobile gaming company Peak for USD 1.8 billion

Global gaming giant Zynga announced today that it had agreed to buy the Turkish mobile game developing company Peak for USD 1.8 billion (TL 12.3 billion) in what will be the FarmVille maker's biggest-ever acquisition to date. With this acquisition,  Zynga will add Peak’s popular puzzle video games Toy Blast and Toon Blast to its portfolio and is thereby expected to increase its daily average users by more than 60%. These two games are two of the most popular mobile puzzle games with more than 200 million and 100 million downloads to date, respectively, and have consistently ranked in the top 20 grossing games on App Store in the US over the last two years. Zynga expects the acquisition to bolster its average mobile daily active users by more than 60%, with Peak's two games collectively averaging 12 million daily users.


Frank Gibeau, chief executive officer of San Francisco based Zynga said that “With the addition of Toon Blast and Toy Blast, we are expanding our live services portfolio to eight forever franchises, meaningfully increasing our global audience base and adding to our exciting new game pipeline”, and “Peak is one of the world’s best puzzle game makers, and we could not be more excited to add such creative and passionate talent to our company.”  Gibeau also said that Peak will also help Zynga to enhance its new game pipeline with additional projects in early development.


The deal will comprise USD 900 million in cash and USD 900 million in stock and is expected to be completed in the third quarter of this year. The gaming giant will pay Peak’s owners 114 million shares priced at USD 7.92, the volume-weighted average closing price per share over the 30-day trading period. Shares of the company were up 6.2% at USD 9.72 in trading before closing. This is Zynga’s biggest acquisition to date, followed by its purchase of the majority state of Finland’s Small Giant Games for USD 560 million in 2018 and its purchase of Istanbul-based mobile gaming company Gram Games for USD 250 million in 2018.


The deal comes as Zynga experiences a financial boost thanks to the coronavirus pandemic. The company said it had experienced its best first quarter earnings in its history at the end of March, reporting that revenue was up 52% year on year to USD 404 million. The firm raised its full-year 2020 revenue forecast to USD 1.7 billion.


Peak was founded by Sidar Şahin in 2010 with the support of venture capital firms Endeavor Catalyst, Earlybird Venture Capital and Hummingbird Ventures. With the deal, Peak's 100-strong team and its portfolio of mobile game franchises will join Zynga. Zynga management first met Peak’s co-founder and CEO Sidar Sahin in 2017, when Zynga bought Peak’s casual card business for USD 100 million. This business included games such as Spades Plus, Gin Rummy Plus and 101 Okey Plus.


Roland Manger, co-founder and partner of Earlybird Venture Capital, one of Peak’s backers, said that “Peak is an amazing founder success story ‘Made in Istanbul’ and the first Turkish unicorn exit.” Pamir Gelenbe, a partner at Hummingbird Ventures, said that “the Peak team proved that we can produce tech unicorns in Turkey and this is a great milestone for the local ecosystem,” and that the seed investors will receive a return of more than 200 times their initial investment. This is the first time that a Turkish start-up company has been sold for more than USD 1 billion, thereby earning it the title of unicorn. Previously, China’s e-commerce Alibaba had purchased Turkey’s Trendyol for USD 728 million, and German delivery firm Hero had purchased Turkey’s Yemeksepeti for 589 million in 2015. 


Great interest in the purchase of Peak has been shown by the Turkish government which is struggling with an economic recession in Turkey, and needs all the moral support it can get. The purchase will also help meet the government’s need for foreign currency at a time of great stress with the coronavirus pandemic adversely affecting exports and shutting down the tourism sector this year.


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