American social game developer Zynga Inc. has agreed to buy Turkish mobile-game maker Peak Games for $1.8 billion.
Announced on Monday, the record-breaking deal is the largest acquisition ever for the gaming sector, comprising of $900 million in cash and $900 million in Zynga stock.
According to Bloomberg, the Peak purchase “eclipses earlier transactions”, including a 2018 deal to buy the majority stake in Finland’s Small Giant Games for $560 million.
The deal between the San Francisco-headquartered company and the Turkish firm is set for completion in the third quarter of the year.
The acquisition comes at a time when the industry has enjoyed major growth as consumers seek indoor entertainment during the coronavirus lockdown.
Istanbul-based Peak has hit global popularity with a multitude of games including Toon Blast, Toy Blast and Lost Bubble-Bubble Shooter.
Founded in 2010 by Sidar Şahin, the Turkish firm has 100 employees. Under the terms of agreement with Zynga, the firm’s staff will continue to work under the Peak brand to maintain existing franchises and to progress the projects already in development.
Commenting on the record-breaking deal in a press statement, Şahin said: “What we have achieved today is a point of pride for all of Turkey and we know that this is just the beginning.
“As we continue this journey with Zynga, we will grow stronger and bigger together, making us all excited about what the future holds.”
The Zynga-Peak deal dwarfs the acquisition of Yemeksepeti in 2015, when Germany’s Delivery Hero bought the online food delivery app for $589 million. It’s also more than double the $728 million paid by Chinese e-commerce giant Alibaba for Turkish online retail fashion portal Trendyol in 2018.
With a price tag of nearly $2 billion, Peak also becomes Turkey’s first “unicorn” – a term coined for privately held start-up companies that are valued at over $1 billion.
“Peak is an amazing founder success story ‘Made in Istanbul’ and the first Turkish unicorn exit,” said Roland Manger, a co-founder and partner of Earlybird Venture Capital, and one of Peak’s backers.
The value of the firm to its new owner was confirmed by Zynga Chief Executive Officer Frank Gibeau, who said in an interview that Peak could add some $300 million to their takings in the latter half of this year.
The CEO believes the acquisition will significantly expand Zynga’s international audience, potentially boosting the average number of daily game players by 60%.
This isn’t Zynga’s first Turkish purchase. In 2017, the US company bought Peak’s casual card business for $100 million, taking over a portfolio of games that included Spades Plus, Gin Rummy Plus and 101 Okey Plus. The following year, Zynga also acquired Gram Games.