Electronic Arts to Acquire GluMobile for $2.4B

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Electronic Arts is making a new push into the mobile gaming sphere with a splashy acquisition. The company announced Monday that it is acquiring GluMobile for $2.1 billion in enterprise value.

That price will be paid entirely in cash. Current GluMobile stockholders are to receive $12.50 each per share, which is 33% higher than Monday’s closing price. After hours, understandably, that level shot up to around the purchase price.

GluMobile is a very active developer of mobile games, many of which are created on the basis of licenses for familiar intellectual property. Among its many titles are Kim Kardashian: Hollywood, MLB Tap Sports Baseball, and Aliens: Unleashed, which are readily available on the top mobile app platforms.

In its press release heralding the acquisition, Electronic Arts quoted its CEO Andrew Wilson as saying that it “combines amazing teams and deeply engaging products to create a mobile games leader with proven expertise across many fast-growing genres.”

The gaming giant added that mobile is the largest gaming platform today; the addition of GluMobile will double the size of its efforts in the segment. Electronic Arts did not, however, provide estimates as to how the inclusion of the new asset might impact its fundamentals.

The acquisition is subject to approval by GluMobile shareholders, although it’s hard to imagine they’ll object given the share price premium. The deal must also win approval from the relevant regulatory authorities. Electronic Arts believes the purchase will close next quarter, i.e. by June 30.

Separately, GluMobile reported its fourth-quarter earnings Monday. It’s a growing, profitable company — for the quarter, its revenue rose by 25% year over year to $141 million, on bookings that increased 15%. GAAP net income more than doubled, to $23.9 million from Q4 2019’s $10.8 million.