Electronic Arts, the videogame publisher known for franchises like FC and Battlefield, is reportedly in advanced discussions to go private at a valuation of around $50 billion, according to people familiar with the matter.
The potential transaction, backed by investors including private equity firm Silver Lake, Saudi Arabia’s Public Investment Fund, and Jared Kushner’s Affinity Partners, could be announced as early as next week, the sources noted. If completed, it would represent the largest leveraged buyout in history.
EA’s stock rose more than 15% in afternoon trading following the news.
The gaming sector has been facing rising development costs and stiffening competition, all while trying to satisfy high fan expectations amid a broader decline in discretionary consumer spending.
Electronic Arts, with a market valuation exceeding $42 billion, had projected quarterly net bookings below Wall Street estimates in July.
However, the company is counting on Battlefield 6, the latest installment in its popular shooter franchise, to drive bookings and compete with Activision Blizzard’s Call of Duty. EA expects Battlefield 6, set to release during its current fiscal year, to sell millions of copies.
“EA does make sense as an acquisition target – the cash flows are fairly consistent and EA’s annualized titles make for predictable revenue/profitability,” D.A. Davidson & Co analyst Wyatt Swanson said.
EA’s potential privatization, combined with the anticipated launch of Battlefield 6, highlights the company’s strategic efforts to navigate industry challenges, drive growth, and maintain its competitive edge in the gaming market.
