Electronic Arts to be taken private by PIF, Silver Lake and Affinity Partners for $55B

Core Viewpoint - Electronic Arts (EA) is being taken private in a historic $55 billion deal, marking the largest leveraged buyout (LBO) in history [1][2]. Deal Structure - The deal involves a $36 billion equity investment from the Public Investment Fund (PIF) of Saudi Arabia, which will be the largest single investor in the consortium [2][5]. - JP Morgan is providing $20 billion in debt financing for the transaction [2]. - The deal has been in discussions since spring, with Silver Lake and Jared Kushner's firm also participating as investors [3][4]. Financial Details - EA shareholders will receive $210 per share, representing a 17% premium to the all-time high and a premium to the unaffected share price [6]. - The valuation corresponds to 23 times the last 12 months of EBITDA, compared to 19 times for Microsoft's acquisition of Activision [6]. Strategic Implications - The acquisition is seen as a move by the Saudis to gain control over a major gaming company, with a focus on sports-related titles [5][8]. - The deal is expected to close in the second quarter of the next fiscal year [5]. - The CEO of EA, Andrew Wilson, will remain in his position post-acquisition, indicating continuity in leadership [11]. Market Context - The gaming industry is experiencing a scarcity of large companies with strong franchises, making EA a valuable target [7]. - The potential for cross-media opportunities, such as movie adaptations of gaming franchises, is highlighted as an area of growth [9][10].