Electronic Arts to go private in USD55b deal
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The news: Video game maker Electronic Arts (EA) has agreed to be taken private by a consortium including private equity player Silver Lake, Saudi Arabia’s Public Investment Fund (PIF) and Affinity Partners.
The numbers: A press release published on Monday says EA shareholders will receive USD210 ($320) per share in cash, representing a premium of 25% as of the company's closing share price on 25 September, before reports of a deal emerged. The transaction values EA at an approximate enterprise value of USD55 billion.
Under the agreement, the consortium will acquire 100% of EA, with PIF rolling over its existing 9.9% stake in the company.
The context: A press release shared by EA on Monday said that the transaction represents the largest all-cash sponsor take-private investment in history, with the consortium partnering closely with EA to enable the company to move faster and unlock new opportunities on a global stage.
The transaction will be funded by a combination of cash from each of PIF, Silver Lake, and Affinity Partners as well as roll-over of PIF’s existing stake in EA, constituting an equity investment of approximately USD36 billion, and USD20 billion of debt financing fully and solely committed by JPMorgan Chase Bank, USD18 billion of which is expected to be funded at close.
Goldman Sachs is serving as EA’s financial adviser while Wachtell, Lipton, Rosen & Katz is serving as EA’s legal adviser.
Kirkland & Ellis serving as legal counsel to the consortium, with JP Morgan as financial adviser.
What they said: Andrew Wilson, chairman and CEO of Electronic Arts said: “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.”
“PIF is uniquely positioned in the global gaming and esports sectors, building and supporting ecosystems that connect fans, developers, and IP creators,” said Turqi Alnowaiser, Deputy Governor and Head of International Investments at PIF.
Jared Kushner, CEO of Affinity Partners said: “Electronic Arts is an extraordinary company with a world-class management team and a bold vision for the future. I've admired their ability to create iconic, lasting experiences, and as someone who grew up playing their games - and now enjoys them with his kids - I couldn't be more excited about what's ahead.”
The source: Electronic Arts
