Reuters: Technology News: Zynga buys OMGPOP games company for $200 mln: source

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Zynga buys OMGPOP games company for $200 mln: source Mar 21st 2012, 21:45 Tweet Share this Email Print Related News Facebook underwriters to get 1.1 percent fee: source Tue, Mar 20 2012 Jennifer Lawrence fires up "The Hunger Games" Tue, Mar 20 2012 Stars say "Hunger Games" movie violence justified Thu, Mar 15 2012 Zynga files for $400 million secondary offering Wed, Mar 14 2012 Yahoo sues Facebook for infringing 10 patents Mon, Mar 12 2012 Analysis & Opinion Buying equity in people SecondMarket's unnecessary Facebook Fund Related Topics Tech » Deals » Global Deals Review: 2011 Q3 » Global Deals Review: 2011 Q2 » Global Deals Review » Small Business » Inflows Outflows » Media » Facebook » The corporate logo for Zynga is seen on a screen outside the Nasdaq Market Site in New York, December 16, 2011. Credit: Reuters/Brendan McDermid By Sarah McBride and Liana B. Baker Wed Mar 21, 2012 5:45pm EDT (Reuters) - Zynga Inc is buying OMGPOP, maker of the popular video game "Draw Something" for about $200 million in its biggest acquisition to date as the company moves to expand its lineup of games on mobile devices and Facebook. A source familiar with the matter told Reuters that Zynga bought the New York-based company for $200 million. The company declined to comment on the deal's financials or say whether it was accretive on a conference call on Wednesday. Zynga, which raised $1 billion in an initial public offering last December, makes some of the most popular games on tablets and smart phones such as "Words with Friends" and "Scramble with Friends." The $200 million deal is its largest to date and the second-biggest purchase since 2010 when it bought Newtoy Inc, the publisher of "Words With Friends" for $53.3 million. OMGPOP makes the game "Draw Something" where players make digital sketches of items or pop culture figures such as Lady Gaga and then compete to guess what the drawings are. All 40 employees will join Zynga and the company's headquarters will remain in New York, according to a statement. Hudson Square analyst Dan Ernst said Zynga could easily afford a deal worth $200 million because, since its IPO, it has a market capitalization of $11 billion and $2 billion of cash on its balance sheet. But it is always a risk acquiring a company that has only produced one well-known game in recent months, he said. "The big risk is how long do they last? But it seems like a high quality team though and doesn't feel like a one-hit wonder," Ernst said. In the six weeks since "Draw Something" has been the market, it has garnered more than 35 million downloads and risen to the top of the app charts on Apple and Android in 84 countries, according to Zynga. Its popularity on mobile devices could be a boon to Zynga, which investors are watching closely to see if it can diversify outside of Facebook, where it makes 93 percent of its revenue. Zynga said in February that it ended last year with 15 million daily mobile users, a five-fold increase from a year earlier. Zynga shares closed about 2.5 percent, or 33 cents higher, at $13.72 per share on Wednesday. (Reporting by Sarah McBride in San Francisco and Liana B. Baker in New York; editing by Andre Grenon) Global Deals Review: 2011 Q3 Global Deals Review: 2011 Q2 Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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