When EA announced in October that it will go private via a $55 billion leveraged buyout, a consortium of three investment firms were listed as buyers: Saudi Arabia’s Public Investment Fund, Jared Kushner’s Affinity Partners, and Silver Lake. A breakdown of the ownership between these parties wasn’t given at the time, but as it turns out, one is committing significantly more cash than the others.
According to the Wall Street Journal, the PIF will own 93.4 percent of EA—a gargantuan amount that renders the other stakeholders insignificant by comparison. Silver Lake and Affinity Partners are set to own 5.5% and 1.1%, both of whom PIF is also a “significant investor” in.
In other words, if the buyout passes regulatory and shareholder approvals, the PIF will effectively own EA.
The report lists some other finer details about the transaction, now public thanks to a filing with Brazil’s antitrust regulator. $36.4 billion of the $55 billion cost will be funded in equity, while the remaining $20 billion will debt. Remove an existing $5.2 billion stake PIF already has in EA, and it looks like PIF has, according to WSJ, put up “about $29 billion” for EA’s buyout.
PIF’s huge majority may not come as a surprise to everyone: the fund is famously trigger happy when it comes to buying stakes in the games industry, with tentacles in Take-Two, Capcom, Nexon and Nintendo, among others. But with such a large stake, it seems increasingly unlikely that, as EA CEO Andrew Wilson said in October, the “values and our [EA’s] commitment to players and fans around the world remain unchanged”. (For more on this, it’s worth reading Lincoln Carpenter’s in-depth feature on the buyout’s ramifications).
The PIF itself is running at a low ebb when it comes to cash to fund its investments, though as Rick Lane noted last month, its videogame interests aren’t really to blame. The chief culprit there would be a futuristic megacity built in the desert.
