Rovio to acquire Ruby Games from Turkey.

Rovio Entertainment Corp, a Helsinki, Finland-based game developer, announced getting into an agreement to acquire 100% of the shares in Ruby Games, a hyper-casual studio based in Izmir, Turkey.

The deal was made for an upfront cash payment of $10 million, and future earnouts to be paid in cash and stock in multiple tranches.

In the first tranche Rovio will acquire 20% of Ruby’s shares for USD 10 million in cash. The anticipated closing for the first tranche is by end of Q3-2021 or beginning of Q4-2021.

In October 2022, in the second tranche Rovio will acquire 50% of Ruby’s outstanding shares for an amount that is dependent on Ruby’s financial performance as measured by revenue and EBITDA in the previous 12-month period before October 2022, however, not exceeding USD 80 million. The second tranche will be paid 60% in cash and 40% in Rovio’s shares.

The remaining 30% of Ruby’s outstanding shares will be purchased in five equal tranches over the next five years with a minimum of 50% in cash and rest in cash or shares at a valuation based on Ruby’s financial performance measured by EBITDA for each period, however not exceeding total EBITDA generated during this period.

Ruby Games, founded in 2018 by CEO Mert Can Kurum, is the creator of the hit game, Hunter Assassin, the sixth most downloaded game in the world in 2020. It has a portfolio of 13 games, four of which launched in 2020 and three in 2021. The company has 34 employees and in Jan-June 2021, it generated $7.8 million revenue, and adjusted EBITDA of $3.5 million.