Zynga Inc (NASDAQ:ZNGA), the company behind Farmville, has bought Gram Games for $250 million.
Source: Brownpau via Flickr (Modified)
Zynga Inc says that the deal to acquire Gram Games went through on May 25, 2018. ZNGA spent $250 million in cash to acquire the company. It also has a a three-year earn out offer based on how well the company performs.
Zynga Inc notes that its acquisition of Gram Games fits in well with its current strategy for future growth. This includes creating new forever franchises and giving it the ability to build out its services across more platforms.
According to Zynga Inc, Gram Games will benefit from the deal by gaining access to its network. This will allow ZNGA to expand the user base of the company’s games with additional advertising and stronger platform support.
“By acquiring Gram Games, we’re expanding our portfolio of live game franchises, while also adding a number of exciting new starts to our pipeline of future games,” Frank Gibeau, CEO of Zynga Inc, said in a statement. “In particular, we’re huge fans of Merge Dragons! and believe it has the potential to be a new forever franchise for Zynga.”
Zynga Inc also updated its guidance for the second quarter of 2018 to reflect its acquisition of Gram Games. The company says it now expects a GAAP net loss of $15 million, as compared to its previous GAAP net income outlook of $1 million. It is also now expecting GAAP losses per share of 2 cents. The previous guidance had GAAP earnings per share for the quarter being flat.
ZNGA stock was up 2% as of noon Wednesday.
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As of this writing, William White did not hold a position in any of the aforementioned securities.