By Laura Cooper 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (May 15, 2020).

KKR & Co.-backed AppLovin Corp. is expanding by acquiring mobile game developer Machine Zone Inc. and its free-to-play multiuser online games, including "Final Fantasy XV: A New Empire."

As a result of the deal, AppLovin will have almost 800 employees and expected annual revenue of $1.5 billion, according to Herald Chen, the president and chief financial officer who joined AppLovin from KKR last year. Mr. Chen didn't disclose the size of the deal.

Mr. Chen -- who led KKR's Americas technology, media and telecommunications business -- helped craft the firm's $400 million investment in AppLovin in 2018, a deal that valued the company at $2 billion.

Founded in 2012, AppLovin includes a mobile games marketing platform as well as a games and studio business. It has partnered with game developers to help them finance and market their products.

AppLovin's latest acquisition will add a new suite of games to its mobile offerings, including Machine Zone's "Game of War: Fire Age" and "Mobile Strike." AppLovin has traditionally focused on matching and puzzle games, Mr. Chen said.

Popular games can bring in tens of millions of players each month. Before the acquisition, AppLovin had about 30 million daily active users of games from its studios and about 500 million across its entire platform.

Machine Zone has received investments from Y Combinator Management LLC, Anthos Capital LP, Menlo Ventures Management LP and JPMorgan Chase & Co., according to the company. JPMorgan Chase will remain an investor in the company following the deal.

AppLovin previously considered gearing up for an initial public offering this year. But at this stage, Mr. Chen said the company is in no rush to go public, adding that the business has been finding multiple acquisition opportunities, having done more than a dozen deals since KKR invested.

If the window for IPOs opened, Mr. Chen said mobile-game companies like AppLovin would be well-positioned to go public.

Mr. Chen said that despite disruption from the coronavirus pandemic, the company continues to perform. He said that current conditions have had a neutral to positive impact on the business.

Corrections & Amplifications Before its Machine Zone acquisition, AppLovin had about 30 million daily active users of games from its studios. An earlier version of this article incorrectly said it had about 300 million such users. (Corrected on May 14.)

Write to Laura Cooper at laura.cooper@wsj.com

 

(END) Dow Jones Newswires

May 15, 2020 02:47 ET (06:47 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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