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

"Electronic Arts has announced plans to go private in what will be the largest leveraged buyout in history. The $55 billion purchase of the entertainment giant behind franchises that include Madden NFL and Battlefield is set to close in the first quarter of fiscal year 2027. Saudi Arabia's Public Investment Fund (PIF) will be, by far, the majority investor in EA, one of the largest third-party publishers of video games. Silver Lake and Affinity Partners (whose CEO is Donald Trump's son-in-law Jared Kushner) will own minority interests. CEO Andrew Wilson will continue to head EA."

"The all-cash deal calls for a buyout of EA stock at a price of $210 per share. The company was trading at $202 per share Monday afternoon. On Thursday, before The Wall Street Journal reported a buyout was imminent, shares were trading at roughly $171. EA is a long-time stalwart in the video game industry, but like many publishers of late, has been somewhat stalled financially as the gaming boom of the pandemic has slowed considerably. In 2022, EA reported $7.2 billion in revenues. The following year saw an increase to just $7.6 billion and 2024 saw the figure at $7.4 billion. The stock has also lagged far behind the S&P 500's gains."

Electronic Arts will be taken private in a $55 billion leveraged buyout scheduled to close in the first quarter of fiscal 2027. Saudi Arabia's Public Investment Fund will be the majority investor, with Silver Lake and Affinity Partners holding minority stakes, and CEO Andrew Wilson remaining in place. The all-cash offer values EA at $210 per share, above recent trading but below some analyst estimates. EA's revenues were $7.2 billion in 2022, $7.6 billion in 2023, and $7.4 billion in 2024, and the stock has lagged the S&P 500. Some analysts contend the deal undervalues EA's long-term earnings power.

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