Glu Mobile Shares Set 52-Week High Score on $2.4 Billion Merger with Electronic Arts

Source: Streetwise Reports   02/09/2021

Glu Mobile shares traded 35% higher after the company reported it agreed to be acquired by online entertainment and gaming giant Electronic Arts in an all cash transaction for $12.50 per share.

After U.S. markets closed for trading yesterday afternoon, global mobile games developer and publisher Glu Mobile Inc. (GLUU:NASDAQ) and leading interactive entertainment company Glu Mobile Inc. (GLUU:NASDAQ), announced that the two firms entered into a definitive agreement whereby Electronic Arts (EA) will acquire Glu Mobile for $12.50 per share in cash. The report listed that this price represents a 36% premium over Glu’s closing share price on Friday, February 5, 2021, and equates to a total equity value of $2.4 billion and an enterprise value of $2.1 billion, net of $364 million in cash held on Glu’s balance sheet.

The reported stated “the acquisition will immediately add significant scale to Electronic Arts’ mobile games business and that the combination of Electronic Arts and Glu creates a leading mobile product portfolio that includes more than 15 top live services across fast-growing genres with a combined $1.32 billion in bookings over the last twelve months”

The acquisition will serve to join Glu Mobile with Electronic Arts’ mobile business and its network of 430 million players, including greater than 100 million monthly active mobile players and allow the merged company to branch out to new audiences worldwide.

Electronic Arts’ CEO Andrew Wilson commented, “Our acquisition of Glu combines amazing teams and deeply-engaging products to create a mobile games leader with proven expertise across many fast-growing genres…Mobile continues to grow as the biggest gaming platform in the world, and with the addition of Glu’s games and talent, we’re doubling the size of our mobile business. With a deep IP portfolio and an expanding global audience, we’ll deliver more exciting experiences for our players and drive further growth for Electronic Arts.”

Glu Mobile’s CEO Nick Earl remarked, “This transaction is the culmination of the tremendous work of the Glu team to deliver world-class interactive experiences for our players, while driving business momentum that has led to strong financial and operational results. It represents a terrific outcome for all of our stockholders and other key constituents…As part of Electronic Arts, we will continue capitalizing on the opportunities ahead in the expanding mobile gaming industry.”

The report advised that the acquisition will serve to create a leading mobile content portfolio encompassing many key presently popular genres. The merged complementary content product portfolio will offer EA’s biggest and most popular genres of mobile games genres including sports, RPG, lifestyle, casual, and mid-core games to an even wider audience creating significant opportunities for market and franchise development.

The merger will additionally promote the expansion of live interactive services. Each company was been effective individually in deigning mobile live service games that deeply build user engagement and will be even stronger together in deliver strong recurring revenue to more diverse global users.

As a result of the Glu Mobile acquisition, EA will add more than 500 experienced mobile game developers (and nearly 800 total employees) to its talent pool.

The report mentioned that the transaction has already been approved by the Boards of Directors of each of the companies.
The firm stated that the transaction remains subject to approval by Glu Mobile shareholders along with certain regulatory approvals and is expected to close in Q2/21.

Electronic Arts is a large globally-known digital interactive entertainment company headquartered in Redwood City, Calif. The company has a market cap exceeding $41 billion and in 2020 reported GAAP net revenue of $5.5 billion. The firm creates and distributes electronic games, content and online services for internet-connected consoles, personal computers and mobile devices. EA’s vast entertainment portfolio includes “critically acclaimed, high-quality brands such as EA SPORTS™ FIFA, Battlefield™, Apex Legends™, The Sims™, Madden NFL, Need for Speed™, Titanfall™ and Plants vs. Zombies™.”

Glu Mobile is based in San Francisco and is a developer and publisher of mobile games. The firm stated that it has “a diverse portfolio of top-grossing and award-winning original and licensed IP titles including, Covet Fashion, Deer Hunter, Design Home, Diner DASH Adventures, Disney Sorcerer’s Arena, Kim Kardashian: Hollywood and MLB Tap Sports Baseball.”

Glu Mobile started off the day with a market capitalization of around $1.6 billion with approximately 172 million shares outstanding and a short interest of about 11%. GLUU shares opened 33% higher today at $12.51 (+$3.12, +33.23%) over yesterday’s $9.39 closing price and reached a new 52-week high price this morning of $12.72. The stock has traded today between $12.46 and $12.72 per share and is currently trading at $12.71 (+$3.32, +35.36%).

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