Zynga — Merger or Acquisition (January 2022)
24 slides from Zynga's merger presentation, Jan 10, 2022
Slide 1: Take-Two Interactive Software to Combine with Zynga
Filed by Take-Two Interactive Software, Inc. Pursuant to Rule 425 Under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934 Subject Company: Take-Two Interactive Software, Inc. Commission File No.: 001-34003 TAKE-TWO INTERACTIVE SOFTWARE, INC
Slide 2: Cautionary Note: Forward-Looking Statements
Cautionary Note: Forward-Looking Statements Statements contained herein which are not historical facts may be considered forward-looking statements under federal securities laws and may be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “potential,”
Slide 3: Speaker: Strauss Zelnick, Chairman and CEO, Take-Two
END SPEAKER: STRAUSS ZELNICK CHAIRMAN AND CEO, TAKE-TWO 3
Slide 4: Take-Two and Zynga Combine to Enhance Positioning as a Global Leader in Interactive Entertainment
Take-Two and Zynga Combine to Enhance Positioning as a Global Leader in Interactive Entertainment Establishes Take-Two as one of the largest publicly traded interactive entertainment companies in the world with a leadership position in mobile 4
Slide 5: Diverse Portfolio of Industry-Leading Intellectual Property
Diverse Portfolio of Industry-Leading Intellectual Property A leading developer, publisher and marketer of interactive entertainment, the strongest growth segment of the entertainment industry CONSOLE X X X PC X X X MOBILE X X X Top Eleven Two Dots Dragon City Monster Legends 5
Slide 6: Take-Two Overview
Take-Two Overview Company Overview NET BOOKINGS ($ in millions) • Founded in 1993 and headquartered in NYC A leading developer, publisher and marketer of $3,553 • interactive entertainment $2,929 $2,990 • Culture of creativity, innovation and efficiency $1,904 $1,991 • Industry-leading talent, inclu
Slide 7: Product Portfolios are Highly Complementary
Product Portfolios are Highly Complementary Transaction will create an exciting and diverse portfolio of industry-leading titles that span key platforms and genres across interactive entertainment Experienced Studios with Industry-Leading Portfolio of Iconic Console/PC Gaming IP Development and Publ
Slide 8: Take-Two + Zynga Form a Leader in Interactive Entertainment
Take-Two + Zynga Form a Leader in Interactive Entertainment Take-Two possesses some Zynga’s free-to-play of the most successful mobile development talent franchises in interactive & expertise can be entertainment leveraged across Take-Two’s blockbuster original Expertise in console/PC IPs can be app
Slide 9: Benefits of the Transaction
Benefits of the Transaction Both groups of stockholders will benefit from the combined company’s greater scale, enhanced financial profile, and synergies created through the transaction 8% EXPECTED ANNUAL COST PRO-FORMA NET BOOKINGS OF SYNERGIES OF EXPECTED THREE-YEAR CAGR FOR $6.1 BILLION THE MOBIL
Slide 10: Estimated $500+ million of Annual Net Bookings Opportunities
Estimated $500+ million of Annual Net Bookings Opportunities Clear path to bring Take-Two’s console/PC games to mobile Enhancement of existing titles via LiveOps/crossover IP events Use Zynga’s scale and Chartboost ad platform to acquire new users more efficiently & optimize mobile ad inventory Cros
Slide 11: Speaker: Frank Gibeau, CEO and Director, Zynga
SPEAKER: FRANK GIBEAU CEO AND DIRECTOR, ZYNGA 11
Slide 12: Zynga Company Overview
Zynga Company Overview • Pioneer in social gaming and a leading mobile REPORTED BOOKINGS game publisher ($ in millions) • Highly creative and deeply experienced $2,270 management team • Approximately 2,200 of the industry’s top $1,564 creative talent in free-to-play mobile games $970 • Diverse portf
Slide 13: Zynga's Publishing Platform
Zynga’s Publishing Platform PLAYERS DIVERSIFIED GAMES PORTFOLIO GLOBAL STUDIOS 183M Mobile MAUs Top 5 Mobile Game Publisher in the World Nearly 3,000 employees worldwide TALENT, TOOLS & TECHNOLOGY BUILD SCALE ENGAGE, RETAIN & MONETIZE • Analytics & • Chartboost • Product • Chartboost Supply Publishi
Slide 14: Zynga by the Numbers
Zynga by the Numbers 4B 10B INSTALLS ACROSS AVERAGE ZYNGA’S MONTHLY AD GAMES TO DATE IMPRESSIONS 175+ 183mm COUNTRIES MOBILE MONTHLY AVERAGE USERS BOOKINGS ON TRACK TO SINCE 2016, MONTHLY DELIVER A ACTIVE USERS MORE 26% THAN CAGR SINCE 2015 TRIPLED 14
Slide 15: Transaction is Highly Attractive for Zynga Stockholders
Transaction is Highly Attractive for Zynga Stockholders 64% stock premium as Zynga stockholders to own compared to Zynga’s closing approximately one-third of price on 1/7/22 combined company post-close What we can achieve together: • Operate at significantly larger scale in a fast-growing sector • M
Slide 16: Speaker: Lainie Goldstein, CFO, Take-Two
SPEAKER: LAINIE GOLDSTEIN CFO, TAKE-TWO 16
Slide 17: Terms of the Acquisition
Terms of the Acquisition TERMS • Take-Two to acquire all outstanding shares of Zynga in a cash and stock transaction valued at $9.86 per Zynga share1 • Implied total enterprise value of approximately $12.7 billion • Zynga stockholders will receive $3.50 in cash and $6.361 in shares of Take-Two commo
Slide 18: Pro Forma Financials and Expected Growth Rates
Pro Forma Financials and Expected Growth Rates NET BOOKINGS $6.2B $6.1B COMBINED COMPANY EXPECTED GROWTH CAGR* $2.6 $2.8 +14% FY21A – FY24E (excluding any Net Bookings $3.6 opportunities and any future $3.3 acquisitions) TTM 3/31/21 TTM 9/30/21 ADJUSTED UNRESTRICTED OPERATING CASH FLOW* $1.2B $0.3 $
Slide 19: Illustrative Sources & Uses and Pro-Forma Net Debt
Illustrative Sources & Uses and Pro-Forma Net Debt Take-Two will maintain its strong balance sheet, with significant flexibility and annual cash generation Illustrative sources & uses as of 09/30/21 Sources ($B) Uses ($B) Take-Two cash and short-term investments $2.3 Cash to Zynga shareholders2 $4.6
Slide 20: Transaction Unifies Two of the Leading Interactive Entertainment Businesses in the World
Transaction Unifies Two of the Leading Interactive Entertainment Businesses in the World Zynga is a market-leading, diversified mobile Take-Two possesses some of the most platform. Its leadership team has a proven track successful franchises in interactive record of execution and the ability to driv
Slide 21: Appendix
| APPENDIX TAKE-TWO INTERACTIVE
Slide 22: Non-GAAP Financial Measure and Operational Metric
Non-GAAP Financial Measure and Operational Metric Adjusted Unrestricted Operating Cash Flow In addition to reporting financial results in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses a Non-GAAP measure of financial performance: Adjusted Unrestricted Operatin
Slide 23: Reconciliation of GAAP to Non-GAAP Measure
Reconciliation of GAAP to Non-GAAP Measure RECONCILIATION OF GAAP TO NON GAAP MEASURE (in millions) TTM (for the period ending 3/31/21) Take-Two ZZynga Net cash from operating activities $ 912.3 $ 300.7 Net change in Restricted cash related to Operations 8.0 - Adjusted Unrestricted Operating Cash Fl
Slide 24: Thank You
| THANK YOU TAKE-TWO INTERACTIVE