King Digital Entertainment PLC (NYSE:KING) is in talks to acquire Z2 for up to $150 million in cash as the company seeks to create the first U.S. studio. The structure of the deal involves King making an initial cash payment of $45 million with the remaining $105 million to be paid on the achievement of certain targets. The partnership brings together King, which is known for its popular puzzle games and Z2 known for its casual mid-core builder and action games.
King Digital Entertainment PLC (NYSE:KING) believes Z2, maker of Candy Crush, has what it takes to help in the diversification of its gaming offerings. With the acquisition, King is to absorb up to 100 new employees from Z2 that are expected to play an important role in expanding the company’s gaming franchise outside the gaming genre. The acquisition also marks kings 10th gaming studio and the first one in the U.S.
King Digital Entertainment PLC (NYSE:KING) is a gaming juggernaut having averaged 1.5 billion in game plays in the fourth quarter. The company saw its bookings soar by 20%, coming in at $2.4 billion; finishing the year with a healthy profit of $575 million with cash and cash equivalent of $964 million.
Z2 has not been on an impressive run in the gaming space having stumbled last year resulting in the laying off of some support staff.
Started by Damon Danieli, Z2 bagged initial success in the gaming world with the success of iPhone and iPad game. Madrona’s Tim Porter expects Z2’s strategy as well as action games to be a great addition to King Digital Entertainment PLC (NYSE:KING)’s library especially on the push for more mobile games as the use of smartphones continues to be on the rise.
Z2’s led by Lou Fasulo remains confident that king’s way is the best going forward as the company commands a massive global appeal at the back of over 356 million monthly unique users in the fourth quarter.