Videogame Giant Electronic Arts Nears Roughly $50 Billion Deal to Go Private
Investors including Silver Lake eyeing deal that would likely be the largest leveraged buyout ever
- Electronic Arts is nearing a deal to go private, in what could be the largest leveraged buyout ever.
- A group of investors including Silver Lake and Saudi Arabia’s Public Investment Fund could unveil the deal as soon as next week.
- The California-based videogame publisher, known for titles like FIFA and Madden NFL, has a market value of around $43 billion.
Videogame maker Electronic Arts EA 14.57%increase; green up pointing triangle is nearing a deal to go private in what would likely be the largest leveraged buyout of all time, according to people familiar with the matter.
A group of investors including private-equity firm Silver Lake, Saudi Arabia’s Public Investment Fund and Jared Kushner’s investment firm Affinity Partners could unveil a deal for the publisher best known for its sports games as soon as next week, the people said.
EA has long made games including FIFA, the soccer videogame now known as FC, and the football game Madden NFL as well as The Sims and other titles.
The California-based company had a market value of around $43 billion before The Wall Street Journal reported on the talks, which sent the stock up around 14% Friday afternoon.
Assuming a deal comes together, it is likely to rank as the largest leveraged buyout ever, not adjusting for inflation. The largest to date was the 2007 purchase of Texas utility TXU by a group of private-equity firms for around $32 billion, which doesn’t include assumed debt, according to Dealogic.
Massive leveraged buyouts all but disappeared after a number of them performed poorly in the wake of the 2008-09 financial crisis. A group of private-equity firms made a big splash in 2021 when they agreed to buy medical-supply company Medline Industries for more than $30 billion.
EA has been making video games since the early 1980s. Founded by former Apple employee Trip Hawkins, the Silicon Valley company gained backing from major venture capital investors Kleiner Perkins and Sequoia. Its early model focused on highlighting game creators’ works as art, famously referring to its developers and programmers as “software artists.”
The company’s results continue to be propelled by sales of its marquee sports games, FC and Madden. Wall Street analysts have been closely awaiting the release of the latest iteration of EA’s popular shooting game, “Battlefield 6.”
Silver Lake, a technology-focused firm which manages about $110 billion, has made other investments in gaming. The firm owns a stake in Unity Software, which makes game-development software. EA has been a major Unity customer, and former Unity CEO John Riccitiello was previously CEO of EA.
PIF already holds a roughly 10% stake in EA. The Saudi investment fund has been increasing its profile, including through its creation of LIV Golf, a pro-golf league meant to compete with the well-established PGA Tour. (LIV and the Tour agreed to merge in 2023, but have yet to announce terms of a final agreement.) PIF and other investors have poured money into New York real estate, with a multihundred-million-dollar investment in a tower near Central Park.
Kushner, the son-in-law of President Trump, founded Affinity Partners in 2021, according to PitchBook. The firm, based in Florida, has raised money from investors including PIF.