Playtika will pay up to $300 million for Innplay Labs

Playtika, a developer of social games, has signed a firm agreement to buy Israeli-based mobile gaming company Innplay Labs for up to $300.0m (£241.4m/€281.5m).
Playdika
The agreement says Playtika would pay an initial $80.0 million, but several stipulations suggest the eventual cost could be significantly higher. 

Not revealed were further parameters of the agreement, including when the deal may close. Playtika did, however, mention that the intended purchase still depends on some, normal closing requirements.

Established in 2019, Innplay Labs lists Water Ride, Brix Master and Animal Kingdom among its present works. The studio has attracted funding from numerous sources, including Vgames, a venture fund designed for gaming entrepreneurs. 

According to Playtika CEO Robert Antokol, the acquisition helps the company to "strategic" expand their portfolio. 

"The purchase of Innplay Labs marks still another strategic development of our portfolio with a promising and creative growth franchise in the Luck Battle genre," Antokol stated. 

"It offers another chance for us to make continuous, long-term development driven by deeper use of our knowledge in utilising real operations and unique technology.

"As a fellow Israeli-based firm acknowledged for creativity, Innplay's gifted workforce reflects our emphasis on speed and agility. Starting this journey with Innplay and rebranding Animals & Coins excites us.

"In 2019, Innplay Labs founded with the intention of influencing the following generation of mobile gaming," said Innplay CEO Ore Gilron. Four years later, our strong team of gifted highly skilled game operators have combined their interests to produce an amazing game product with rich engaging material, therefore giving our audience an especially interesting gaming experience.

"Looking ahead, we believe becoming part of Playtika's strong portfolio of casual titles will take Innplay Labs to new heights."

M&A activity is raised by Playtika. 
Currently this quarter, the agreement marks Playtika's second transaction. The company signed a contract last month to pay €81.3 million for the Youda Games portfolio of material from Azerion.

Should the purchase go through as planned, Playtika will assume control of the whole portfolio. Among the games in the Youda Games library are several gambling-related ones include Governor of poker with social cards. 

Subject to usual closing conditions, the agreement is due at the end of the third quarter.

Playtika also attempted—and failed—to acquire Rovio Entertainment, the producer of the popular Angry Birds series earlier this year.

Playtika raised its offer in January after first putting a November offering. Playtika CEO Antokol claimed at the time the deal would be beneficial for Rovio's shareholders.

Playtika in March, however, retracted its offer and declared it would not be forward with negotiations. This followed Rovio starting a strategic assessment to weigh bids from Playtika and other interested companies.

Agreed upon in April, Sega Sammy Holdings paid €706.0m to acquire Rovio. Its offer of €9.25 per share exceeded Playtika's €9.05 per share recommendation.

Profit even with a Q2 revenue drop.
For Playtika, this M&A activity set against a mixed Q2 performance. To $642.8 million in the three months to 30 June, revenue dropped 2.5% year-on-year.

While casual games revenue increased 3.7% and Blitz Bingo 6.3%, Playtika observed a 9.9% decline in social casino game revenue. Average daily users dropped 1.0% to 307,000. By comparison, average payer conversion rose 3.2%.

But lower expenses produced a 340.5% larger net profit at $90.3m. Furthermore, modified EBITDA for the quarter climbed 6.7% to $215.0m.