Benchmark Sees Sale/Leaseback Accelerating Zynga (ZNGA) M&A Agenda
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Benchmark analyst Mike Hickey reiterated a Buy rating and $8.00 price target on Zynga (NASDAQ: ZNGA) after the company ZNGA announced a sale leaseback agreement with Beacon Capital Partners for their San Francisco headquarters. This transaction has been widely speculated about and the cash infusion can enhance ZNGA's near term growth profile via M&A.
The analyst stated "We project ZNGA as cash flow positive, and will likely end fiscal 2019 with nearly $1B in cash". "We expect ZNGA will seek to acquire assets that could include GLUU mobile and / or smaller studios looking to scale their business. Additional use of capital will likely be continued repurchase of shares". "ZNGA has a strong recent track record of acquisitions including Gram Games and Small Giant Games. We expect the M&A market will continue to provide opportunities for additional deals".
Shares of Zynga closed at $6.13 yesterday.
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