Activision Blizzard bought King Digital Entertainment, the company that created the wildly popular games Candy Crush and Farm Hero, the titles generating profits of hundreds of millions of dollars for the producer.
5.9 billion dollars is the amount paid by Activision Blizzard for King Digital Entertainment, the community of all the games developed by the former company being over 340 million unique users, so a huge source of income.
At the end of yesterday, King Digital Entertainment had a market capitalization of 4.7 billion dollars on the American stock market, so Activision Blizzard paid 1.2 billion dollars more than what the market thinks the creator of Candy Crush and Farm Hero is worth.
Those from Activision Blizzard bought King Digital Entertainment because their portfolio of games for mobile terminals did not contain any notable title that would generate sustained profit, but things change with this acquisition, Candy Crush being extremely popular.
On November 2, 2015, Activision Blizzard, Inc. and King Digital Entertainment plc announced the signing of a definitive agreement under which ABS Partners CV, a wholly owned subsidiary of Activision Blizzard, will acquire all of the outstanding shares of King for $18.00 in cash per share, for a total equity value of $5.9 billion .
Before the purchase by Activison Blizzard, 30% of King Digital Entertainment's total revenue was generated only by the game Candy Crush, so it was very much dependent on the popularity of the game even though it tried to create other important titles.
The $5.9 billion paid by Activision Blizzard for King Digital Entertainment is enormous, but the revenue generated by the games is probably commensurate with the investment, otherwise the purchase would not have been approved by the company's board of directors.
