‘Battlefield’ maker Electronic Arts to go private in record-setting $55 billion LBO

Written by Zuhair Kashwala

(Reuters) -The Video Electronic Arts developer agreed to sell herself to a group of private sector investors in a deal estimated by the “Battlefield” and “MADDEN NFL” maker at $ 55 billion, which if completed will be the largest purchase in history.

The Public Investment Fund in the Kingdom of Saudi Arabia, and the partners of the rapprochement of Jared Kushner and Silver Lake at Silf Lake, to purchase the popular video game maker with a mixture of $ 36 billion in cash, that the property rights that are already kept by PIF, and $ 20 billion of debt funded by Jpmorgan, according to the company on Monday.

For PIF, the wealth fund in the Kingdom of Saudi Arabia worth $ 1 trillion, investment is an enormous opportunity to move forward in the efforts made to become a global center for games and sports, betting on the permanent value of popular games privileges with the industry recovery from a long drop.

The deal can also hinder the return of the tremendous acquisitions that have been dispensed with, which did not lead to its preference after many major deals have been implemented in the years before the global financial crisis in a disaster. Among these records was $ 45 billion to acquire TXu Energy Txu Energy in 2007, which ended in bankruptcy only seven years after only seven years.

Kyle Wallets, Pitchbook private stock analyst, said that the EA deal “waving the green flag to the shepherds who resume the huge round transactions after several years of fishing for the opportunities available in the market due to the opposite winds in the market, such as high borrowing costs.”

EA’s shareholders will receive $ 210 per share, which is a premium of 25 % at the September 25 closure price of $ 168.32, before reports on a deal, which gives it the value of shares of about $ 52.5 billion, according to Reuters accounts. The shares of the company increased by 5 % in the middle of the day to about 202.54 dollars per share.

This special show comes in a decisive time for EA, which is largely dating back to the basic sport portfolio and divorced intellectual property to overcome the slow video game industry where the players get satisfied with spending.

“Financial support and investor -investing Consortium resources must be able to increase its focus on long -term growth opportunities that may have been seen as risky or expensive as a public company.”

Electronic Arts is preparing to launch a long -awaited “Battlefield 6” in an industry where players are committed to the well -known and well -known titles.

However, “although the $ 210 stock offer may seem convincing … we think it is less than the fundamental value of the company. With the presence of Battlefield 6 on the verge of launching a pipeline can add more than $ 2 billion in the increasing reservations by the 28th fiscal year, the power of real profits in EA only started to appear.”

The sports company’s portfolio has emerged for more than a decade due to its global popularity and frequent revenues, as strong spending patterns in the game remain a key to the length of concession.

This deal also has a great appeal to the wealth fund in the Kingdom of Saudi Arabia as part of the Kingdom’s plans to diversify its economy away from oil by pouring billions in sectors, including infrastructure, tourism, sports and games.

Kushner, married to the daughter of US president Donald Trump, Ivanka, started rapprochement partners in 2021. The company has money investments in Saudi Arabia, Qatar and the United Arab Emirates.

The deal is expected to be closed in the first quarter of the fiscal year 2027 with $ 18 billion in the closure -funded debt. It will remain in the city of Redwood City, California, with CEO Andrew Wilson remaining at the head.

The previous LBO record holder, the TXU Energy Txu Energy Energy, which costs $ 45 billion in 2007 by KKR & Co. , And the director of alternative assets TPG and Goldman Sachs, in 2014. The acquisitions of the “R” and HERTZ games were also going.

TOYS “R” USA’s bankruptcy in 2017 applied for about twelve years of Bain Capital and KKR to retail retail for $ 6.6 billion. HERTZ Automotive Heroes did not survive, as it was submitted for bankruptcy in 2020 after it became $ 14.8 billion in 2005.

EA must pay a billion dollars if the integration process is completed due to the reflection of the Board of Directors, accepts a higher offer, or follows another deal within a year of the shareholders’ refusal.

The consortium owes the same amount if the organizational delay pays its completion on September 28, 2026, or if it violates the agreement.

(Participated in the reports of Zuhair Kashwala in Bangaluru; edited by Karafila, Elisa Martinelli, David Javin, Don Kubki, Franklin Paul and David Gregorio)