EA Agrees to $55 Billion Sale in Largest Leveraged Buyout on Record
The consortium, which includes Silver Lake Management, Saudi Arabia’s Public Investment Fund and Jared Kushner’s Affinity Partners, agreed to pay $210 per share in cash for the Redwood, California-based company, according to a statement Monday. That represents a 25% premium to where its shares traded before the talks leaked on Friday.
Electronic Arts, the maker of EA Sports FC and The Sims, is selling amid sluggish growth for the $178 billion video game industry, after sales swelled during the pandemic lockdowns. The company, which has experienced numerous rounds of layoffs, has been seeking new areas of growth to inspire players who have gravitated toward free-to-play franchises that are continually updated rather than splash out on new titles that can cost $80.
Read More: EA Buyout Talk Highlights Gaming Struggles as Growth Slows
The transaction will be funded with cash from the consortium partners, and Saudi Arabia’s PIF will roll over its existing 9.9% stake in the company, constituting an equity investment of about $36 billion. JPMorgan Chase & Co. will provide $20 billion of debt financing. The deal comes with a termination fee of $1 billion should it fall apart, according to a company filing.