Unpacking

Unpacking the $5.9BN King Acquisition Price

Activision Blizzard's $5.9BN acquisition of King Digital, announced in November 2015, is the largest ever for a mobile game developer, and the analysis here argues the price is justified despite a 20% premium on King's enterprise value.

• Activision Blizzard acquired King Digital for $5.9 billion, representing a 20% premium on King's enterprise value and 8x its projected 2016 EBITDA.
• Activision Blizzard funded $3.6 billion of the purchase price using offshore cash, allowing the company to avoid US repatriation taxes on the transaction.
• The acquisition provides Activision Blizzard with access to King’s 330 million monthly unique users, 60% of whom are female, offering a strategic demographic expansion.