EA will go private in $55B deal led by private equity firms

[Electronic Arts Germany office]
tupungato

Confirming last week's reports, video game publisher Electronic Arts (NASDAQ:EA [https://seekingalpha.com/symbol/EA]) said on Monday that it will go private in a historic $55B deal led by several private equity firms.

The deal from Silver Lake, Saudi Arabia's Public Investment Fund — known as PIF in the statement — and Affinity Partners will see the trio acquire EA for $210 per share in cash. That represents a 25% premium to the unaffected share price prior to last week's report from The Wall Street Journal [https://seekingalpha.com/news/4499589-electronic-arts-jumps-on-report-of-50-billlion-deal-to-go-private].

EA shares, which were halted prior to the announcement, rose 5% following the announcement. Other video game stocks, such as Take-Two (TTWO [https://seekingalpha.com/symbol/TTWO]), rose following the news.

PIF will roll over its existing 9.9% stake in EA, the company said in a statement [https://seekingalpha.com/pr/20246961-ea-announces-agreement-to-be-acquired-by-pif-silver-lake-and-affinity-partners-for-55-billion].

The $55B deal to acquire the maker of _Madden_ NFL franchise and _The Sims_ is the largest leveraged buyout [https://seekingalpha.com/news/4499654-jared-kushner-could-be-part-of-eas-historic-50b-leveraged-buyout-here-are-the-top-lbos] in history, topping the $45B that investors paid for TXU, now Energy Future Holdings, in 2007.

The transaction will be funded with cash from Silver Lake, PIF and Affinity Partners, which is led by CEO Jared Kushner, the son-in-law of President Trump, representing roughly $36B. Approximately $20B will come from debt financing via J.P. Morgan (JPM [https://seekingalpha.com/symbol/JPM]), with $18B expected to be funded at close.

The deal includes a merger termination fee of $1B, according to the release.

“Our creative and passionate teams at EA have delivered extraordinary experiences for hundreds of millions of fans, built some of the world’s most iconic IP, and created significant value for our business. This moment is a powerful recognition of their remarkable work,” said Electronic Arts CEO and Chairman Andrew Wilson in the statement. “Looking ahead, we will continue to push the boundaries of entertainment, sports, and technology, unlocking new opportunities. Together with our partners, we will create transformative experiences to inspire generations to come. I am more energized than ever about the future we are building.”

Following the deal's closure, which is expected to happen in the first-quarter of fiscal 2027, Wilson will remain as CEO and the company will remain headquartered in Redwood City, Calif.

Goldman Sachs (GS [https://seekingalpha.com/symbol/GS]) served as EA's financial advisor and Wachtell, Lipton, Rosen & Katz served as EA’s legal advisor on the deal. Kirkland & Ellis LLP is serving as legal counsel to the consortium of firms acquiring EA.

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