Leaf Mobile has entered into a letter of intent to acquire Candian mobile specialist Truly Social Games.

The letter is non-binding. However, the proposed transaction will not exceed CAD $37 million ($29 million).

It is said that the transaction will be split into three sections, to be completed over a 42 month period.

Furthermore, the initial purchase is expected to close within 90 days of the letter of intent being submitted.

Initially, Leaf will acquire 20 per cent of the studio for a cash sum of CAD $3 million ($2.4 million), which Truly Social Games will use to develop four new games.

Next, at a consideration of CAD $4 million ($3.2 million), Leaf will acquire a further 20 per cent, though this will be paid in common shares. However, this depends on TSG meeting certain targets over a two-year period regarding its new projects.

Aggressive strategy

Finally, the remaining 60 per cent of the Vancouver-based developer could be snapped up for CAD 15 million ($11.9 million). Again, this will be paid in Leaf shares, though it depends on TSG's performance over three years.

"Leaf believes that the proposed transaction with Truly Social Games further demonstrates execution of our aggressive M&A strategy," said Leaf CEO Darcy Taylor.

"We believe that this transaction creates a strong precedent for other teams developing on our IdleKit technology game framework and showcases the pipeline of M&A opportunities it provides.

"We will also expand our footprint into new geographies and game genres to further strengthen LEAF's portfolio. The team at Truly Social Games are a skilled studio with strong experience utilizing our IdleKit framework, and we see strong growth potential with an exciting development pipeline in 2021."

Making good on its commitment to M&A last month, when Leaf Mobile snapped up East Side Games for $125 million.