AppLovin selling games business to private company for $500m in cash and $400m in shares
| Date | Type | Companies Involved | Size |
|---|---|---|---|
| Mar 2, 2025 | acquisition | AppLovin | $900m |
AppLovin could sell its games business for $500 million in cash and $400m in shares of the mystery buyer’s common equity.
The ad tech firm’s annual report has shed some light on the recently announced deal to sell its games division for $900m.
AppLovin entered into a non-binding term sheet for the sale to a privately held company on February 12th, 2025. The deal is subject to “customary price adjustments”.
To fund the deal, the acquirer will borrow up to $250m in cash. However, if it’s unable to obtain that money, AppLovin will provide financing through the issuance of a promissory note.
The term sheet currently prevents AppLovin from engaging in discussions with other potential buyers for an undisclosed period.
Undisclosed party
The identity of the potential buyer still remains a mystery. There has been rampant speculation in the industry over who the acquirer could be, with Savvy Games Group a front runner.
The disclosure that the company is private rules out public companies such as Playtika – which said last week it will spend $300m to $450m on “bolt-on” acquisitions over the next three years – and some top public Asian publishers like Tencent.
AppLovin has a number of partner studios, including Lion Studios, Machine Zone, Belka Games, Magic Tavern and PeopleFun.
In 2024, the company’s app revenue increased by 3% year-over-year to $1.5 billion, making up 68% of total sales. Meanwhile, ad revenue rose 75% Y/Y to $3.2bn.
"We've never been a game developer at heart," said AppLovin CEO Adam Foroughi on the plans to sell its games business.
Potential acquisitions
When it comes to other potential M&A activity in future, AppLovin said it would consider opportunities to accelerate its growth.
“Given our proven track record in strategic transactions, and our long-standing relationships with key industry players, we have earned a reputation as a partner of choice, and will continue to consider and leverage strategic acquisitions, partnerships, and investment opportunities to accelerate our growth,” read a statement in its annual report.
Companies
