- M&A
- January 20, 2023
- 4 minutes read
Israel’s Playtika Bids To Buy Angry Birds Game Maker Rovio For $740M
Brace up for the first major mergers & acquisitions activity in the gaming industry in 2023. Playtika (NASDAQ: PLTK), an…
Brace up for the first major mergers & acquisitions activity in the gaming industry in 2023. Playtika (NASDAQ: PLTK), an Israeli mobile games maker, has placed a formal bid to acquire Rovio Entertainment (HEL: ROVIO), the Finnish gaming studio behind the popular Angry Birds mobile game. Playtika is offering 9.05 euros per share, totaling 683 million euros ($738mn), a 55% premium to Rovio’s market value before the announcement.
Playtika submitted an 8.50 euros per share bid in November 2022, which was previously unannounced. The Israeli firm sweetened its offer by about 6% this Thursday.
- Playtika is famous for its casino-style games and apps for solitaire and poker. It reported a $188mn net profit on $2bn in revenue in the nine months ending September 2022.
- Rovio is best known for Angry Birds, a casual puzzle game centered around using a slingshot to throw birds at green pigs to destroy them. Angry Birds has totaled over 5 billion downloads across different platforms, a massive success, but Rovio has failed to replicate its success in another title, making the company a one-trick pony. The game studio has seen lax growth, such that its revenue in 2021 was less than its revenue in 2017, the year it went public.
- For reference, Rovio went public at a $1bn valuation and was worth half of that amount before Playtika’s latest bid. Playtika the acquirer has also struggled on the public markets; it went public at an $11bn valuation in 2021 but has a current market value of $3.7bn. The Israeli gaming company laid off 15% of its staff in December 2022.
Rovio’s board announced that it’s evaluating Playtika’s offer but hasn’t engaged in direct negotiations with the company. The acquisition is contingent on the board’s approval and from at least 90% of Rovio’s shareholders. Given the high (55%) premium and Rovio’s lax stock performance over the years, it’s likely that the acquisition will go through if the gaming studio doesn’t get a higher competing offer.
