Electronic Arts, known for popular video game titles such as “Madden NFL,” “Battlefield,” and “The Sims,” is set to be acquired for a record-breaking $55 billion in the largest leveraged buyout attempt in history. The acquisition deal, unveiled on Monday, will see private equity firm Silver Lake Partners, Saudi Arabia’s sovereign wealth fund PIF, and Affinity Partners offering $210 per share to the company’s stockholders. Notably, Affinity Partners, led by Jared Kushner, son-in-law of President Donald Trump, is involved in this acquisition.
Should the transaction proceed as planned, Electronic Arts (EA) will transition from a publicly traded company to a private entity. The $55 billion deal surpasses the previous record of $32 billion paid to privatize Texas utility TXU in 2007. EA, which began its public trading journey 36 years ago with shares closing at 52 cents (split-adjusted) on its debut day, was founded by William “Trip” Hawkins, a former Apple employee who developed a passion for sports games during his teenage years.
Since 2013, EA has been under the leadership of CEO Andrew Wilson. The company operates various studios and offices across Canada, including locations in Edmonton, Montreal, Toronto, Vancouver, and Victoria, B.C.
This acquisition involving Silver Lake is the second high-profile deal in recent times, following its joint venture with Oracle in the TikTok acquisition deal. Silver Lake’s track record includes successful buyouts of Skype and Dell, with Dell subsequently returning to the public market.
Transitioning to private ownership will enable EA to restructure its operations free from the constraints of public market pressures. Despite its loyal fan base, EA’s revenues have remained stagnant in recent years, while facing increased competition from the likes of Activision Blizzard and mobile game developers like Epic Games.
While privatized companies often undergo cost-cutting measures post-acquisition, EA has not indicated any imminent layoffs despite previous reductions in its workforce.