Glu Mobile Acquires Griptonite, Blammo Games for Stock, Earnouts Worth More Than $50M
Like many other mobile game developers including Zynga and Electronic Arts, Glu is trying to boost the number and quality of titles it can roll out through a combination of acquisitions and partnerships. Other mid-size and smaller companies like Crowdstar and TinyCo have built funds where they finance titles from up-and-coming developers.
Glu says Kirkland, Washington-based Griptonite will double the company’s internal capacity with 200 more employees (some of whom are in India). The company paid for the acquisition with 6.1 million shares of stock worth $28.1 million at today’s share price.
“The opportunity — at the stroke of a pen — to nearly double studio capacity at a great price was obviously something we initially looked at,” said chief executive Niccolo de Masi in today’s earnings call, where Glu Mobile said it pulled in $9.4 million in smartphone revenue this quarter. The company, which has been making a difficult transition over the past few years from feature phone to smartphone revenue, still produced a net loss of $1.75 million.
De Masi stressed that this doesn’t herald a string of acquisitions.
“This is not the beginning of a roll-up strategy,” he said. “You can take this as a one-off because we feel we have all of the assets we need to get through to profitability.”
Blammo Games will bring know-how in casual, social and mobile gaming. The two companies had already worked together through Glu’s gPartners program where both companies would collaborate on design, development, marketing and distribution. The Toronto-based company is run by Christopher Locke, who helped produce titles like Beeline Interactive’s Smurf’s Village and Zombie Cafe.
Glu is paying 1 million shares of common stock, worth $4.6 million at today’s share price, and up to 3.3 million more shares (worth $15.2 million at today’s price) for Blammo if the company meets certain earnout targets. Glu also allocated more than 1 million shares to retain and incentivize the new employees coming on-board from the acquisitions.