Mobile game studio Glu, which had a big hit in 2014 with the success of the mobile title Kim Kardashian: Hollywood, announced this week that it will be selling 21 million common stock shares to Tencent Holdings Limited. As the stock was sold at $6 per share, this translates to a whopping $126 million deal driven by the success of a wildly popular mobile game.
Tencent will first be buying 12.5 million shares, and had committed to buying the remaining 8.5 million shares once the specified waiting period expires or is terminated. Reports claim the deal would be completed by the second quarter of 2015, which would then have Tencent owning 14.6 percent of Glu.
The announcement came on the heels of a successful Glu financial report for the first quarter of 2015. The game developer reported a non-GAAP revenue of $62.4 million and $2.1 million in profit, good for earnings per share of $0.02. This represented a 33 percent jump in revenue from the year-ago first quarter. Wall Street analysts had forecasted much lower figures – revenue of only $51.6 million and a negative $0.01 earnings per share. Glu also offered more positive guidance for the calendar year, raising its revenue forecast to between $262 million and $287 million for the year, up from a range of $245 million to $275 million.
“I am proud to announce that we have entered into a strategic relationship with arguably Asia’s largest internet company and the world’s largest games company –Tencent,” said Glu Chairman and CEO Niccolo de Masi in a prepared statement. “I consider their expertise in gaming to be unrivalled and we are excited to power ahead with the support of a fantastic partner that believes in our strategy and shares our vision.”