EA makes history with $55,000,000,000 buyout
Electronic Arts Inc., often shortened to EA, has broken records following a leveraged buyout worth $55,000,000,000, and the game development giant has decided to go private in a shocking move.
Mammoth purchases aren't exactly a rarity in the games industry these days, as we've seen both Microsoft and Sony absorb a number of developers big and small for eye-watering sums of money, yet it's a rarity to see a development studio be sold in a manner quite like this.
EA has long been considered one of the giants of the gaming industry, in part due to its dominant position within the money-printing sports genre thanks to titles such as EA Sports FC (formerly FIFA) and Madden.
It has also had long-term success with multiplayer titles like Battlefield, alongside iconic single player series such as The Sims, Mass Effect, and Dragon Age, among many others.
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As reported by Bloomberg, the news was officially revealed on Monday that Electronic Arts Inc. had agreeded to sell itself in a leveraged buyout, with Saudi Arabia's Public Investment Fund (PIF) alongside private equity firms Silver Lake Management and Affinity Partners being on the receiving end of the deal.
The buyers agreed to pay $210 per share, totalling up to around $55 billion and representing a roughly 25% premium on EA's stock price on Friday, although it did briefly rise after news of the deal was leaked.
It represents a new record for the largest ever leveraged buyout, trumping the previous leader by around $10 billion. The record was formerly held by TXU, now Energy Future Holdings, which was sold for a leveraged $45 billion all the way back in 2007.
The sale follows comparatively 'sluggish' growth for the game developer after a sales boom during the pandemic, and EA already laid off between 300 and 400 employees earlier this year alongside cancelling a number of in-development titles.
Andrew Wilson, EA's chief executive officer, outlined in a statement: "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 businesses. This moment is a powerful recognition of their remarkable work."
Analysts have pinned this as another telling sign of the 'deal boom' that was expected following Donald Trump's reelection, and it likely won't be the last big money sale of the year as we approach the final quarter.
While EA's sale might be record breaking in one major aspect, it's still quite a way off the biggest acquisition of a gaming studio, as that title remains still tied to Microsoft's purchase of Call of Duty maker Activision Blizzard for approximately $69 billion.