Video game giant Electronic Arts Inc. EA reached an agreement to acquire Glu Mobile Inc. GLUU and the decision was applauded by multiple Street analysts.

The Electronic Arts Analysts: Raymond James analyst Andrew Marok maintains an Outperform rating on EA's stock with a $164 price target.

KeyBanc Capital Markets analyst Tyler Parker maintains an Overweight rating on EA's stock with a $165 price target.

BofA Securities analyst Ryan Gee maintains a Neutral rating on EA's stock with a $153 price target.

EA's Focus On Mobile: Glu Mobile, the maker of popular mobile games like "Design Home," "MLB Tap Sports Baseball," and "Kim Kardashian: Hollywood," will bring new opportunities to EA's mobile lineup, Marok wrote in a note. EA has mostly focused on mobile adaptations of sports games and a "Star Wars" title, so there's limited genre overlap between audiences.

Marok said EA will be able to leverage its strong marketing and distribution resources to promote Glu's games to existing mobile users.

The video game giant paid less than four times trailing bookings to acquire Glu and the price tag is reasonable as it will bolster its mobile platform. EA is unlikely to pursue another acquisition although it may consider new deals if it comes across an attractive asset for sale at a good price.

Win-Win Deal: EA's acquisition will double its mobile business immediately after the deal closes and the addition of hundreds of mobile developers bodes well for the future of its mobile business, Parker wrote in a note.

On the other side of the deal, Glu shareholders can benefit from a "favorable exit" as the deal values the stock at 3.1 times 2021 EV/sales and a 36% premium to Friday's closing price.

'Modest' Benefits: EA's mobile business grew at just 9% throughout 2020 versus the entire mobile games space that rose 30%, Gee wrote in a note. EA's poor performance likely prompted management to "buy growth now" for Glu at a premium valuation of 18 times 2022E EBITDA versus pure-play digital gaming peers that trade at around 13 times.

Meanwhile, Glu is far from the largest mobile game maker and its 2020 EBITDA of 12% is less than half of its industry peers. As such, the deal will provide "modest" EPS accretion of 5% on fiscal 2023 results.

Price Action: Shares of EA were trading higher by more than 3.8% at $147.93. Glu Mobile was up 35% at $12.62.