In a move to strengthen its mobile game portfolio, US-based gaming company Zynga, known for developing social games, has entered into an agreement to acquire Small Giant Games — maker of popular title Empires & Puzzles, for a sum of around $700 million.

Initially, Zynga will acquire about 80 percent stake of the company for $560 million in cash and stock which includes approximately $330 million in cash and $230 million of unregistered Zynga common stock. The final upfront transaction consideration will also include customary closing adjustments and will be partially funded by a newly established $200 million revolving credit facility.

The remaining 20 percent of the company will be purchased over the next three years at valuations based on specified profitability goals. This is the company’s biggest deal so far. Previously, the company’s largest acquisition was NaturalMotion for $527 million in 2014.

Frank Gibeau, who became CEO of Zynga in 2016, is trying to revamp the company as a mobile-focused games maker and is looking for new games to spark growth after a challenging year that saw earnings disappoint. This deal is a reflection of Gibeau’s strategy of growing brand through both the creation of new games and acquisitions.

In a statement, Timo Soininen, co-founder of Small Giant Games said:

Our studio was founded on the idea that small, skillful teams can accomplish giant things, and I am confident that partnering with Zynga is the right next step in our evolution. We will now operate as a separate studio within Zynga, maintaining our identity, culture and creative independence. By leveraging the expertise and support from the wider Zynga team, we will amplify the reach of Empires & Puzzles and the new games in our development pipeline.

The cash-and-stock deal for the acquisition of Small Giant Games is expected to close on January 1. It follows acquisition of 1010 mobile game maker Gram Games for $250 million in cash and other considerations. Prior to that, Zynga had acquired Peak Games for $100 million.

The acquisition of Small Giant Games comes after the company produced a hit game Empires & Puzzles, which has been downloaded more than 24 million times in the past 18 months and has broken into the top 10 grossing games on iOS and Android.

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