Zynga Inc (NASDAQ:ZNGA) Issues Class A Shares To Raise Proceeds To Fund Stake In Natural


Dallas, Texas 02/19/2014 (FINANCIALSTRENDS) – The $4.2 billion market capped multimedia and graphics software maker Zynga Inc (NASDAQ:ZNGA) saw its stock zoom upwards of 5.7 percent during trading on 18th February on the back of news that it had completed the purchase of all its outstanding shares in the stock of U.K based firm NaturalMotion Limited. The tri-partite deal was initially reported on 30th January between Zynga  Game International Limited, which is a fully owned firm of Zynga Inc (NASDAQ:ZNGA), and all share holders of Natural Motion who were represented by a third party firm Shareholder Representative Services LLC.

To finance the deal, Zynga Inc (NASDAQ:ZNGA) has used up close to $391 million it had accumulated in cash and has also issued an additional 39.8 million shares of Class A stock. 1/4th of the nearly 40 million stock of class A stock has been issued to its existing employees and will be vested with them for a three year tenure. Also as per the terms of the agreement, the software maker has set aside $50 million cash corpus in an escrow account, which will be touched only in the event of any untoward incidents related to breach of trust, expiration of warranty and any other unforeseen circumstances.

Zynga Inc (NASDAQ:ZNGA) followed up this announcement on 11th February, with a new update that it would be selling an additional 28,178,201 shares, which at the current market price is expected to fetch $125 million. The update goes on to clarify that the proceeds from the secondary offer would not be accrued to the firm since, “the offer and resale is being done by the selling stockholders who have been identified in this prospectus of up to an aggregate of 28,178,201 shares of our Class A common stock”. The share of Zynga Inc (NASDAQ:ZNGA) was trading at $5.15 per share, which is 1.78 percent above its 52 week high price point.