EA has entered into an agreement to acquire BioWare/Pandemic in a deal that will involve up to $620 million in cash and $155 million in equity, as well as a loan of some pocket change totaling $35 million. Here's a bit:
REDWOOD CITY, Calif.--(BUSINESS WIRE)--Electronic Arts Inc. (NASDAQ:ERTS - News) today announced an agreement with Elevation Partners to acquire VG Holding Corp. -- the owner of both BioWare Corp. and Pandemic Studios. This acquisition gives EA a strong competitive position in key genres in interactive entertainment: action, adventure and role-playing games. The two studios have been recognized for creating some of the highest-quality games in the industry.
BioWare Corp. and Pandemic Studios have ten franchises under development, including six wholly owned games. BioWare Corp. is currently developing the highly anticipated Mass Effect, which will be published by Microsoft in November, and is in the early development stages of a massively multiplayer online game. Pandemic Studios is redefining open-world games with its upcoming Mercenaries 2: World in Flames(TM) and Saboteur(TM), in addition to several unannounced projects.
Pandemic Studios and BioWare Corp. employ roughly 800 people across four studios located in Edmonton, Canada; Los Angeles; Austin; and Brisbane, Australia
http://www.shacknews.com/onearticle.x/49412
Update: In a conference call on the buyout, EA CFO Warren Jensen gave more details of the acquisition, including the total cost of the deal for the publisher: $860 million. "We've looked at a lot of companies and have had our eye on these studios for several years," Jensen said. "This is a powerful combination of creative talent and portfolio strength."
As motivations for the acquisition, Jensen listed the need to fill gaps in EA's portfolio of games--specifically with BioWare's RPGs and Pandemic's open-world titles--as well as EA's interest to further support MMO development with BioWare's upcoming massively multiplayer project. And of course, EA expects to make gobs of money from the purchase.
"In fiscal 2009 and 2010, we expect the BioWare and Pandemic properties to deliver revenue in excess of $300 million annually," he said.
EA CEO and former Elevation Partners CEO John Riccitiello addressed his involvement in the deal, conceding that the acquisition is "likely to result in a personal financial benefit at some time in the near future," and saying an independent party would be involved to ensure fair play for investors' sakes.
Addressing an analyst's question about the logistics of the acquisition, EA Games president Frank Gibeau said neither BioWare's nor Pandemic's studios would be altered in any way. "These are extremely strong studios in their own right," Gibeau said. "Inside of our label structure, they're going to be maintaining their autonomy and their cultural independence."
Goodbye quality...
