Please ensure Javascript is enabled for purposes of website accessibility

Electronic Arts Acquiring GluMobile for $2.4 Billion

By Eric Volkman - Feb 8, 2021 at 7:45PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The deal dramatically expands the company's presence in the mobile gaming sphere.

Electronic Arts (EA 1.90%) is making a new push into the mobile gaming sphere with a splashy acquisition. The company announced Monday that it is acquiring GluMobile (GLUU) 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.

Young man triumphantly looking at a smartphone.

Image source: Getty Images.

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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Electronic Arts Inc. Stock Quote
Electronic Arts Inc.
EA
$133.25 (1.90%) $2.49
Glu Mobile Stock Quote
Glu Mobile
GLUU

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/23/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.