Activision Acquires Candy Crush Developer King For $5.9 Billion
Activision has announced that it has acquired King Digital for $5.9 billion. The announcement comes in conjunction with the publisher's earnings call, which is scheduled for tomorrow morning.
King Digital is best known for its work developing the Candy Crush series, which has become a cultural phenomenon following its explosion onto iOS and Android in 2012. In 2014, King followed up its most successful property with Candy Crush Soda Saga. In addition to the Candy Crush series, King, which was founded in 2003, has also released games such as Bubble Witch Saga, Farm Heroes Saga, and Papa Pear Saga.
Despite the high purchase price, Activision Blizzard CEO Bobby Kotick is optimistic about the acquisition. "Mobile gaming is the largest and fastest-growing opportunity for interactive entertainment and we will have one of the world's most successful mobile game companies and its talented teams providing great content to new customers, in new geographies throughout the world," he said in a press release. "King has a truly fantastic management team and over 1,600 incredibly talented employees and we are excited to welcome them into the Activision Blizzard family."
Activision Blizzard also announced "better than expected" financial results in the third quarter of 2015, including $697 million in non-GAAP digital revenues and increased revenues across both GAAP and non-GAAP revenues when compared to prior outlooks. The company is expected to elaborate on the purchase tomorrow morning during a conference call. King Digital Entertainment will announce its quarterly financial report on Wednesday, November 4 as previously planned
More: Activision says that King will continue to operate as an independent business unit. CEO Riccardo Zacconi will continue to lead the company with existing management, including chief creative officer Sebastian Knutsson and chief operating officer Stephane Kurgan.
Activision acquired the company with a purchase of outstanding shares at $18. Additionally, current shareholder value is pegged at $18, which represents a significant premium. The per share purchase price represents 20 percent more than at closing on October 30, 23 percent more than the one month weighted average, and 27 percent more than the three month weighted average.
This may seem like a ton of money for King Digital, but with how popular Candy Crush is, it's likely a good buy for Activision Blizzard. When combined with the numbers that beat the company's outlook, this is good news to report to shareholders.