Yesterday, Rockstar and 2K parent company Take-Two Interactive announced that it would be acquiring mobile development giant Zynga (best known for its work on games like FarmVille) for a record sum of $12.7 billion. In an investor call following the meet, Take-Two CEO Strauss Zelnick clarified the company’s future plans regarding acquisitions.
Zelnick talked about how the Zynga deal will affect the company’s finances in the the fiscal year, creating very little net debt even after completing this humongous transaction. He expects the company to be in a net cash flow situation by 2024 fiscal year, and start generating cash flow immediately after the transaction is completely.
“In terms of your question regarding ongoing acquisitions, that’s still something that will be of interest to us,” Zelnick said (as reported by VGC). “We will close this transaction with a fortress like balance sheet, with very little net debt. We expect to be in a net cash position within a few years, by fiscal 24 [the business year ending March 31, 2024].”
Most importantly however, he also talked about how the company will still be in a position to acquire following the transaction, and its approach remains the same of looking out for great teams and helping them expand even further.
“We expect to generate positive cash flow on an ongoing basis as soon as the transaction closes and we expect the transaction to be accretive, so we’ll be in a powerful position to continue to acquire, and our approach to acquisition remains the same, which is we’re looking for great teams, great intellectual property, and accretive transactions. This transaction, for example, is expected to be accretive upon its closing,” Zelnick said.
The Zynga acquisition is one of the biggest acquisitions in recent memory, following-up on the acquisition of ZeniMax Media by Microsoft, which was completed for a sum of $7.5 billion. Hence, it’s rather interesting to know that Take-Two’s finances haven’t taken a big hit despite the huge sum, all while being in a position to acquire even more. In the same investor meet, Zelnick also talked about how Zynga will help in bringing Take-Two’s biggest franchises to mobile platforms “relatively soon” – read more on that through here.
