Electronic Arts signs $55-billion deal with Saudi Arabia’s Public Investment Fund and others to go private. Analysts say it’s worth more

Core Viewpoint - Electronic Arts (EA) is set to go private in a $55 billion leveraged buyout, marking the largest in history, with the deal expected to close in the first quarter of fiscal year 2027 [1] Group 1: Buyout Details - The buyout will occur at a price of $210 per share, significantly higher than the recent trading price of $202 and the pre-announcement price of $171 [2] - Saudi Arabia's Public Investment Fund (PIF) will be the majority investor, with Silver Lake and Affinity Partners holding minority stakes [1] Group 2: Financial Performance - EA's revenue was $7.2 billion in 2022, increased to $7.6 billion in 2023, and is projected to be $7.4 billion in 2024, indicating a slowdown in growth [3] - EA's stock performance has lagged behind the S&P 500, reflecting challenges in the gaming industry post-pandemic [3] Group 3: Valuation Concerns - Analysts express concerns that EA may be undervalued in the buyout, with some suggesting a fair value of $250 per share, potentially reaching $300 if the Battlefield franchise succeeds [5] - The purchase price represents a lower EBITDA multiple compared to the Activision deal and is on par with the industry average, suggesting EA's rich intellectual property could command a higher valuation [7]