Electronic Arts is on the verge of ending decades of life as a publicly traded company.
The publisher agreed to an all-cash take-private deal worth roughly $55bn, paying shareholders $210 per share. It is the largest leveraged buyout ever recorded.
The buyers are a consortium: Saudi Arabia’s Public Investment Fund, U.S. private equity firm Silver Lake, and Affinity Partners, the investment firm founded by Jared Kushner. PIF already held a minority stake in EA of just under 10% and is rolling that into the deal.
Around $20bn of the price tag comes from debt financing arranged through JPMorgan. That is the part making players nervous, because in a leveraged buyout the acquired company’s future cash flow typically ends up servicing that debt.
Andrew Wilson is set to stay on as CEO, with EA keeping its headquarters in Redwood City, California. Wilson also stands to collect a massive payout from his own EA shares once the deal closes, based on figures reported in the company’s filings.
Once the transaction completes, EA stock disappears from Nasdaq. No more quarterly earnings calls, no more public share price, no more analysts picking apart Ultimate Team revenue every three months.
To be clear, “private” doesn’t mean EA suddenly has no shareholders. It has three very large ones, plus lenders who expect to be paid.
