January 24th, 2008 by Arjan Olsder Posted in Companies & M&A | No Comments »
MoCoNews reports today about Needham analyst Mark May who is not
positive on the upcoming acquisition of SuperScape by Glu (GLUU).
The four main reasons are;
1. SuperScape is growing slower then Glu, and growth has slowed materially in recent quarters.
2. Superscape is loosing money, but Glu might use synergies to the cut down the spendings
3. Glu is paying more in an EV/revenue basis (~1.7x) then it is currently trading for (~0.6x)
4. Even by eliminating 30% of the staff and cutting overhead costs, SuperScape will only be at breakeven in the second half of 2008. This makes the deal more about gaining revenue scale then advancing profitability near-term.
So to conclude, this seems to be the second acquisition of Glu which might not make investors happy as the MIG acquisition was also criticised widely along the mobile games industry. Credits for this post go to the team over at MoCoNews.
