Jared Kushner’s firm and the Saudis to acquire video gamer Electronic Arts in largest private equity buyout
Saudi Arabia and an investment group led by Jared Kushner are funding the $55 billion takeover of video game developer Electronic Arts.
Electronic Arts, the maker of video games like “Madden NFL," “Battlefield,” and “The Sims,” is being acquired for $52.5 billion in what could become the largest buyout ever funded by private equity firms.
Silver Lake Partners, Saudi Arabia’s sovereign wealth fund PIF, and Affinity Partners will pay EA’s stockholders $210 per share. Affinity Partners is run by President Donald Trump’s son-in-law, Jared Kushner.
The deal is valued at $55 billion if AE’s debt is included, far exceeding the $32 billion price tag to take Texas utility TXU private in 2007, which had shattered records for leveraged buyouts.
PIF, which was currently the largest insider stakeholder in Electronic Arts, will be rolling over its existing 9.9% investment in the company.
The commitment to the massive deal is inline with recent activity in the gaming sector by Saudi Arabia's sovereign wealth fund, wrote Andrew Marok of Raymond James.
“The Saudi PIF has been a very active player in the video gaming market since 2022, taking minority stakes in most scaled public video gaming publishers, and also outright purchases of companies like ESL, FACEIT, and Scopely,” he wrote. “The PIF has made its intentions to scale its gaming arm, Savvy Gaming Group, clear, and the EA deal would represent the biggest such move to date by some distance.”
{{/usCountry}}“The Saudi PIF has been a very active player in the video gaming market since 2022, taking minority stakes in most scaled public video gaming publishers, and also outright purchases of companies like ESL, FACEIT, and Scopely,” he wrote. “The PIF has made its intentions to scale its gaming arm, Savvy Gaming Group, clear, and the EA deal would represent the biggest such move to date by some distance.”
{{/usCountry}}PIF is also a minority investor in Nintendo.
{{/usCountry}}PIF is also a minority investor in Nintendo.
{{/usCountry}}If the transaction closes as anticipated, it will end EA’s 36-year history as a publicly traded company that began with its shares ending its first day of trading at a split-adjusted 52 cents.
{{/usCountry}}If the transaction closes as anticipated, it will end EA’s 36-year history as a publicly traded company that began with its shares ending its first day of trading at a split-adjusted 52 cents.
{{/usCountry}}The IPO came seven years after EA was founded by former Apple employee William “Trip” Hawkins, who began playing analog versions of baseball and football made by “Strat-O-Matic” as a teenager during the 1960s.
{{/usCountry}}The IPO came seven years after EA was founded by former Apple employee William “Trip” Hawkins, who began playing analog versions of baseball and football made by “Strat-O-Matic” as a teenager during the 1960s.
{{/usCountry}}CEO Andrew Wilson has led the company since 2013 and he will remain in that role, the firms said Monday. Electronic Arts would be taken private and its headquarters would remain in Redwood City, California.
“Electronic Arts is an extraordinary company with a world-class management team and a bold vision for the future," said Kushner, CEO of Affinity Partners. “I’ve admired their ability to create iconic, lasting experiences, and as someone who grew up playing their games - and now enjoys them with his kids - I couldn’t be more excited about what’s ahead.”
This marks the second high-profile deal involving Silver Lake and a technology company with a legion of loyal fans in recent weeks. Silver Lake is also part of a newly formed joint venture spearheaded by Oracle involved in a deal to take over the U.S. oversight of TikTok’s social video platform, although all the details of that complex transaction haven’t been divulged yet.
Silver Lake also bought out two other well-known technology companies, the now-defunct video calling service Skype in a $1.9 billion deal completed in 2009, and a $24.9 billion buyout of personal computer maker Dell in 2013. After Dell restructured its operations as a private company, it returned to the stock market with publicly traded shares in 2018.
By going private, EA will be able to retool operations without worrying about market reactions. Although its video games still have a fervent following, EA’s annual revenues have been stagnant during the past three fiscal years, hovering from $7.4 billion to $7.6 billion.
Mike Hickey of The Benchmark Company thinks the proposed deal's $210 per share offer price may be falling short of EA's intrinsic value.
“With Battlefield 6 about to launch and a pipeline that could add more than $2B in incremental bookings by FY28, the true earnings power of EA is only beginning to emerge,” he wrote.
Hickey is unsure if the transaction is in shareholders' best interest.
“In our view, this transaction is a self-serving, opportunistic move by management and the investor group,” he wrote. "Management has long been rumored to seek a sale around $200 per share, a level that may have been defensible in prior years but not in the current environment where visibility into growth, franchise momentum, and pipeline strength is far more robust. The board’s decision to recommend a sale at $210 per share suggests a prioritization of near-term certainty and legacy over maximizing long-term shareholder value."
EA shares, which rose nearly 5% on Monday, had jumped 15% on Friday after rumors of a takeover began to circulate.
The deal is expected to close in the first quarter of fiscal 2027. It still needs approval from EA shareholders.
The size of the video game market has attracted large investors in recent years.
One of EA’s biggest rivals Activision Blizzard was snapped up by technology powerhouse Microsoft for nearly $69 billion in 2023, while the competition from mobile video game makers such as Epic Games has intensified.
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