PopCap Games Being Acquired... By Who?

Time to pop a cork, not just a cap, when you sell your company for over $1 billion.

Word is coming from TechCrunch that PopCap Games, makers of such hit games as Bejeweled and Plants Vs. Zombies, is being acquired, with the purchase price rumored to be north of $1 billion dollars. The big question is, who's the lucky (and wealthy!) buyer? There's no shortage of suspects, but one name that springs to mind right away, Zynga, is not in fact the buyer. Though Zynga did look closely at PopCap, in the end they decided the price tag was a little too much for them. PopCap's revenues are said to be in the range of $100 to $150 million annually, which puts the purchase price well over a 10x multiple... which is very pricey as these sorts of deals go (a 3x multiple is considered a standard valuation).

If Zynga's not the buyer, who does that leave? Well, there's... EA, who's certainly not averse to growing by acquisition. But that purchase price is a significant chunk of their $7.9 billion valuation. So it may be too rich for them... then again, they've been eyeing Take 2, so they are not opposed to spending a lot on an acquisition if they think it's a worthwhile strategic move. I'm not sure that PopCap is worthy of such a healthy valuation, though.

Activision, of course, could really use some diversification... they are basically nowhere in casual, social, or mobile gaming, which are the high-growth areas of the industry (traditional games being in negative growth for the past three years). Or perhaps an Asian company like TenCent wants to get into the Western market in a bigger way.

I expect the answers to be revealed over the next week or so. It'll be interesting to see who shows up as the mystery buyer.