The fact that Activision Blizzard bought Candy Crush creator King Digital startled people less than the sheer size of the deal: $5.9 billion. As many noted, that’s almost $2 billion more than Disney paid for either Marvel or Lucasfilm. It’s more than twice the $2.5 billion Microsoft paid for Minecraft maker Mojang, a property that feels like it has more long-term staying power than Candy Crush. And it’s about nine times the $650 million Electronic Arts paid for PopCap, creators of Bejeweled, the game whose underlying behavior lies at the heart of Candy Crush.
Six billion dollars is a lot of money, but all dollars are not equal. Activision paid $3.6 billion of the sum in offshore cash. Some analysts say it would have cost Activision nearly a third of that to repatriate that money, which means that the company “saved” $1 billion just by inking the deal.
The remaining $2.3 billion is financed by long-term loans, paid back against the very low interest rates common in the present market. So in real, immediate terms, King cost Activision a lot less liquid cash than the $5.9 billion price tag suggests.
Some have rightly observed that at $18 per share, King is is being bought for roughly 20 percent less than its initial public offering price of $22.50 back in March 2014. But as the investment manager Dan Tubb observed, King’s profit is a more important figure than its share price.