POPCAPS TO BE ACQUIRED BY ELECTRONIC ARTS
14th July, 2011 at 12:14:56
$750 million deal, with another $550 million depending on performance
The Seattle-based developer of online games for mobile phones, tablets, PCs and social network sites, PopCap Games, is to be acquired by gaming software giant Electronic Arts for $650 million in cash and $100 million in shares of EA common stock, with a further $550 million payable depending on agreed performance targets being met.
With blockbuster titles like Plants vs. Zombies, Bejeweled, and Zuma, and a proven ability to create new hits, PopCap is respected as a major player in the fast growing market for casual digital games, and its products can be seen on many online gambling sites
EA and PopCap are a compelling combination, said EA chief exec John Riccitiello this week. PopCap's great studio talent and powerful IP add to EA's momentum and accelerate our drive towards a $1 billion digital business. EA's global studio and publishing network will help PopCap rapidly expand their business to more digital devices, more countries, and more channels.
We picked EA because they have recast their culture around making great digital games, said David Roberts, CEO of PopCap. By working with EA, we'll scale our games and services to deliver more social, mobile, casual fun to an even bigger, global audience.
PopCap is headquartered in Seattle, with several smaller studios around the world.
PopCap has a proven financial trajectory with sustained revenue growth and double-digit operating margins, said EA CFO Eric Brown.
More than 150 million PopCap games are installed and played worldwide on platforms such as Facebook, RenRen, Google, iPhone, iPad and Android. In calendar year 2010, approximately 80% of PopCap's revenue was on high growth digital platforms.
The transaction is expected to close in August.
In preparations for the deal, EA received $550 million in debt commitments from Morgan Stanley, JPMorgan Chasen and USA It was also advised by Morgan Stanley and UBS.
When the sale is complete, PopCap will become a part of EA Interactive led by Barry Cottle.
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