Electronic Arts to Exit Public Markets in $55B LBO
Electronic Arts (EA) is set to exit the stock market today in a $55 billion leveraged buyout, led by a consortium including Saudi Arabia's Public Investment Fund (PIF), Jared Kushner's Affinity Partners, and US private equity firm Silver Lake. Shareholders will receive $210 per share in cash, a 25% premium. The deal, contingent on regulatory and shareholder approvals, signals the growing appeal of gaming companies to private capital and sovereign funds.
The consortium, which also includes PIF, will fund the acquisition via a mix of equity and debt financing. If completed, the deal would become the largest leveraged buyout ever and one of the largest all-cash transactions in the tech/gaming space. Some analysts argue that the $210 per share offer may undervalue EA's growth potential, given upcoming releases like Battlefield 6. The heavy debt load poses financial risk, and the success of the deal depends on EA's ability to maintain or grow revenues and manage operating cash flow. The transaction is expected to close in fiscal Q1 2027, pending customary closing conditions such as regulatory approval and shareholder vote. EA's departure reduces the number of major independent game publishers trading in the stock market today, with competitors like Take-Two likely facing increased attention.
The privatization of Electronic Arts, led by a high-profile consortium, marks a significant shift in the gaming industry. Shareholders stand to benefit from the premium offer, but the deal's success hinges on EA's financial performance post-privatization. The gaming giant's exit from the stock market today may also bring increased scrutiny to its competitors.
