Electronic Arts (EA), known for titles like Madden NFL, Battlefield, and The Sims, has been acquired for $52.5 billion. This could set a new record for the largest acquisition funded by a private equity firm.
Silver Lake Partners, along with Saudi Arabia’s Public Investment Fund (PIF) and Affinity Partners, is paying EA shareholders $210 per share. Notably, Affinity Partners is led by Jared Kushner, former President Donald Trump’s son-in-law.
If liabilities are factored in, the deal is valued at $55 billion, which exceeds the $32 billion spent on the Texas Utility TXU Private in 2007, thus breaking the record for leveraged buyouts.
PIF has significantly increased its stake in EA, now exceeding its previous 9.9% investment.
Andrew Mallock from Raymond James noted that this move aligns with Saudi Arabia’s increased activity in the gaming sector. Since 2022, PIF has invested in multiple public gaming companies and fully acquired firms like ESL, Faceit, and Scopely. “PIF’s strategy focuses on game arms and agile gaming companies, with this EA transaction being one of its most significant steps yet,” he remarked.
PIF is also a minority stakeholder in Nintendo.
Should the deal close as anticipated, EA will end its 36 years as a publicly traded company; it began its trading journey at just 52 cents per share. The IPO followed the company’s founding by former Apple employee William “Trip” Hawkins in 1982.
CEO Andrew Wilson, who has been at the helm since 2013, will continue in his role post-acquisition, and EA’s main operations will stay in Redwood City, California.
Jared Kushner commented, “EA is an exceptional company with a top-tier management team and a visionary outlook. I’m a fan myself, having played since I was young, and I love sharing that with my kids.”
This development marks Silver Lake’s second significant deal in recent weeks involving tech companies with dedicated fan bases. Silver Lake is also engaged in a joint venture with Oracle related to a deal concerning TikTok’s social video platform, though specifics are still under wraps.
Previously, Silver Lake acquired several notable tech companies, including Skype in a $1.9 billion deal in 2009 and Dell for $24.9 billion in 2013.
With the shift to private status, EA can adjust its operations without the scrutiny of the stock market. However, its annual revenue has plateaued recently, ranging from $7.4 billion to $7.6 billion over the last three fiscal years.
Mike Hickey from Benchmarking company expressed some skepticism about the $210 per share offer, suggesting it may not reflect EA’s true value. “With Battlefield 6 launching soon, EA’s real profit potential is just starting to reveal itself, and by FY28, new bookings could exceed $20 billion,” he noted.
Yet, he questioned whether this deal truly benefits shareholders. “This transaction appears more like a self-serving move by management and investors,” he said. “Management has long sought around $200 per share, which might have made sense in the past, but not now, given the clearer growth visibility and franchise strength.”
EA’s stock surged nearly 5% on Monday, adding 15% on Friday after acquisition rumors surfaced.
The deal is projected to finalize in the first quarter of fiscal year 2027, pending approval from EA shareholders.
The growing size of the video game market has drawn considerable investment interest recently. Meanwhile, one of EA’s main competitors, Activision Blizzard, was acquired by Microsoft in 2023 for nearly $69 billion.
