Consideration of $250 million in cash and stock, plus earn-out of up
to $25.9 million
Further diversifies Take-Two’s business and significantly enhances
Company’s position in free-to-play mobile games market
NEW YORK--(BUSINESS WIRE)--Feb. 1, 2017--
Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today announced that
it has acquired privately-held Social Point S.L. for $250 million,
comprised of $175 million in cash and 1,480,168 unregistered shares of
Take-Two common stock (calculated by dividing $75 million by the average
closing price per share on the Nasdaq Global Select Market during the
thirty trading day period ending on January 26, 2017), plus potential
earn-out consideration of up to an aggregate of $25.9 million in cash
and shares of Take-Two common stock. The cash portion was funded from
Take-Two’s cash on hand.
Founded in 2008 and headquartered in Barcelona, Spain, Social Point is a
highly-successful free-to-play mobile game developer that focuses on
delivering high-quality, deeply-engaging entertainment experiences.
Social Point is led by an experienced senior management team, including
Horacio Martos and Andrés Bou, Co-Chief Executive Officers and Founders,
and Marc Canaleta, Chief Technology Officer and Co-Founder, and has over
270 employees. Social Point currently has multiple profitable titles in
the market. The company’s two most successful games, Dragon City
and Monster Legends, have been downloaded more than 180 million
times to date on iOS and Android platforms and consistently have charted
in the top-100 grossing mobile games in the United States since 2014.(1)
In addition, Social Point has a robust development pipeline with a
number of exciting games planned for launch over the next two years.
Social Point’s games currently are available in North America, Latin
America and EMEA, and approximately 50% of its revenue is derived from
the United States. In 2016, over 90% of its revenue was generated from
“With the acquisition of Social Point, Take-Two has further diversified
its business, expanded its portfolio of owned intellectual property, and
significantly enhanced its position in the fast-growing free-to-play
mobile gaming space,” said Strauss Zelnick, Chairman and CEO of
Take-Two. “The experienced team at Social Point shares our commitment to
delighting consumers with high-quality entertainment, and we believe
that Social Point’s deeply-engaging mobile offerings will be a perfect
complement to our business. Social Point is one of the few mobile game
developers that has a proven track record of growing revenues and
delivering multiple hits, and we expect this growth to continue given
the company’s exciting development pipeline. We are fortunate to have
acquired Social Point in a transaction that is expected to be
immediately accretive to net cash provided by operating activities, and
to be accretive to net income per share, excluding transaction costs and
amortization of intangible assets, in fiscal 2018.”
“Take-Two is one of the interactive entertainment industry’s premier
publishers, whose labels are renowned throughout the world for their
ability to create some of the most successful and beloved entertainment
experiences on consoles and PC,” added Horacio Martos and Andrés Bou,
Co-Chief Executive Officers and Founders of Social Point. “We are
thrilled to have Social Point become part of an organization that shares
our commitment to quality and innovation, and we look forward to being
part of Take-Two’s continued success for many years to come.”
Acquisition further diversifies Take-Two’s business and should
meaningfully enhance the Company’s revenues from recurrent consumer
spending. The acquisition of Social Point expands
Take-Two’s portfolio of owned intellectual property and significantly
enhances the Company’s position in the free-to-play mobile games
market, which is the world’s highest-grossing video game segment with
gross revenues estimated to be in excess of $40 billion in 2016, and
significant growth across all regions.(2) Take-Two expects
Social Point’s high-quality, deeply-engaging free-to-play mobile
offerings to provide consistent revenue from recurrent consumer
spending throughout the year, and to meaningfully enhance and further
diversify Take-Two’s already strong revenue from recurrent consumer
Acquisition is expected to be immediately accretive to net
revenue and net cash provided by operating activities, and to be
accretive to net income per share, excluding transaction costs and
amortization of intangible assets, in the fiscal year ending March 31,
2018. Social Point has been consistently profitable
since 2013 and has grown net revenue at a 29% CAGR from 2013 through
2016. For the trailing 12-months ended December 31, 2016, Social Point
generated net revenue of $90.8 million and EBITDA of $19.9 million.
Take-Two expects that Social Point’s business will continue to grow in
the fiscal year ending March 31, 2018.
Social Point’s business, which is focused on high-quality,
deeply-engaging mobile games, should be a perfect complement to
Take-Two’s core games business. Social Point produces
high-quality entertainment that can attract and retain a loyal,
highly-engaged player base and deliver sustainable results. Social
Point focuses on “mid-core” games that feature greater gameplay depth
than casual games, and the company’s titles typically monetize and
retain players at higher rates than its competitors in this segment.
Social Point has multiple hit titles that continue to deliver
stable results. Since 2014, Dragon City and Monster
Legends have consistently been included in the App Store’s top-100
grossing mobile games in the United States,(1) and have
continued to deliver stable revenues and profits from a steady level
of monthly average users.
Social Point has strong growth prospects. Social Point
has a robust development pipeline with a number exciting games planned
for launch over the next two years. In addition, Social Point has
growth opportunities through geographic expansion, as its current
games have not yet been released in Asia.
Social Point has a proven senior management team with
significant experience and a track record of producing multiple hits
in the free-to-play mobile games market. Social Point
is one of only six publishers that have had at least two games
simultaneously in the App Store’s annual top-100 grossing mobile games
chart every year since 2014.(1)
Social Point brings a cutting-edge, proprietary data analytics
platform and experienced data analytics team.
(1) Source: AppAnnie data as of January 21, 2017. Top-100
Grossing games in the U.S. App Store calculated at the end of 2014,
2015, and 2016. Excludes the casino genre.
(2) According to estimates from the International Development
Take-Two acquired all of the outstanding share capital of Social Point
for $250 million, comprised of $175 million in cash and 1,480,168
unregistered shares of its common stock (calculated by dividing $75
million by the average closing price per share on the Nasdaq Global
Select Market during the thirty trading day period ending on January
26, 2017). Take-Two entered into a registration rights agreement
pursuant to which it agreed to register the shares issued for resale.
The cash portion was funded from Take-Two’s cash on hand.
The founders of Social Point will remain with the company following
the closing and are eligible to receive earn-out consideration of up
to an aggregate of $25.9 million in cash and shares of Take-Two common
stock, contingent on Social Point’s business achieving certain EBITDA
targets over the 12 and 24 month periods following the closing.
Take-Two plans to report financial results for the third quarter of its
fiscal year 2017, ended December 31, 2016, after the market close on
Tuesday, February 7, 2017. The Company plans to hold a conference call
to discuss both its results and the Social Point acquisition at 4:30
p.m. Eastern Time on February 7, 2017, which can be accessed by dialing
(877) 407-0984 or (201) 689-8577. A live, listen-only webcast and a
replay of the call will be available at http://ir.take2games.com/.
About Take-Two Interactive Software
Headquartered in New York City, Take-Two Interactive Software, Inc. is a
leading developer, publisher and marketer of interactive entertainment
for consumers around the globe. The Company develops and publishes
products through its two wholly-owned labels Rockstar Games and 2K. Our
products are designed for console systems and personal computers,
including smartphones and tablets, and are delivered through physical
retail, digital download, online platforms and cloud streaming services.
The Company’s common stock is publicly traded on NASDAQ under the symbol
TTWO. For more corporate and product information please visit our
website at http://www.take2games.com.
All trademarks and copyrights contained herein are the property of their
Cautionary Note Regarding Forward-Looking
The statements contained herein which are not historical facts are
considered forward-looking statements under federal securities laws and
may be identified by words such as "anticipates," "believes,"
"estimates," "expects," "intends," "plans," "potential," "predicts,"
"projects," "seeks," “should,” "will," or words of similar meaning and
include, but are not limited to, statements regarding the outlook for
the Company's future business and financial performance. Such
forward-looking statements are based on the current beliefs of our
management as well as assumptions made by and information currently
available to them, which are subject to inherent uncertainties, risks
and changes in circumstances that are difficult to predict. Actual
outcomes and results may vary materially from these forward-looking
statements based on a variety of risks and uncertainties including: our
dependence on key management and product development personnel, our
dependence on our Grand Theft Auto products and our ability to develop
other hit titles, our ability to successfully integrate Social Point’s
operations and employees, the timely release and significant market
acceptance of our games, the ability to maintain acceptable pricing
levels on our games, and risks associated with international operations.
Other important factors and information are contained in the Company's
most recent Annual Report on Form 10-K, including the risks summarized
in the section entitled "Risk Factors," the Company’s most recent
Quarterly Report on Form 10-Q, and the Company's other periodic filings
with the SEC, which can be accessed at www.take2games.com.
All forward-looking statements are qualified by these cautionary
statements and apply only as of the date they are made. The Company
undertakes no obligation to update any forward-looking statement,
whether as a result of new information, future events or otherwise.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170201005224/en/
Source: Take-Two Interactive
Take-Two Interactive Software, Inc.
A. Diamond, 646-536-3005
Senior Vice President
Relations & Corporate Communications
Alan Lewis, 646-536-2983
Communications & Public Affairs