EA Buys Bioware and Pandemic Studios
by Chad Lakkis on October 11, 2007 at 8:20 pm
For every one that breaks free, two more get sucked in. As Microsoft’s cleaning crews entered the empty offices once held by the employees of Bungie Studios, another industry giant, Electronic Arts, was finalizing a deal to purchase VG Holding Corp, owners of both Bioware Corp (Mass Effect) and Pandemic Studios (Mercenaries 2: World in Flames & Saboteur).
“These are two of the most respected studios in the industry and I’m glad to be working with them again. They’ll make a strong contribution to our strategic growth initiatives on quality, online gaming and developing new intellectual properties,” said John Riccitiello, EA’s Chief Executive Officer. “We also expect this will drive long-term value for our shareholders.”
Price tag for all this? In the ballpark of $785 million — $620 million in cash to the companies stockholders, and an additional $155 million in equity to “certain employees” of the VG Holding Corp. We are going to go out on a limb and say that the janitor and kitchen crew won’t be seeing any of that dough. Have at the press release after the jump.
EA TO ACQUIRE BIOWARE CORP. AND PANDEMIC STUDIOS
Leaders in RPG, Action and Adventure Genres; Ten Franchises in Development – Six Wholly Owned
REDWOOD CITY, Calif., October 11, 2007 – Electronic Arts Inc. (NASDAQ:ERTS) 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™ and Saboteur™, 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.
“These are two of the most respected studios in the industry and I’m glad to be working with them again. They’ll make a strong contribution to our strategic growth initiatives on quality, online gaming and developing new intellectual properties,” said John Riccitiello, EA’s Chief Executive Officer. “We also expect this will drive long-term value for our shareholders.”
Pandemic Studios is led by Andrew Goldman, Josh Resnick and Greg Borrud. BioWare Corp. is jointly led by Greg Zeschuk and Ray Muzyka. These teams will join the EA™ Games Label run by Frank Gibeau, President of EA Games.
“Pandemic Studios remains focused on attracting the best talent and creating blockbuster action games,” said Josh Resnick, President and Co-founder of Pandemic Studios. “As a worldwide publishing leader, EA represents the ideal partner to bring our titles to market as global entertainment events.”
“We are truly excited by John Riccitiello’s new vision for EA,” said Ray Muzyka, Co-founder and CEO of BioWare Corp. “This vision is consistent with BioWare’s focus on crafting the highest quality story-driven games in the world. It will enable us to further the careers of the passionate, creative and hard working teams at BioWare Edmonton and BioWare Austin.”
EA will pay up to $620 million in cash to the stockholders of VG Holding Corp. and will issue up to an additional $155 million in equity to certain employees of VG Holding Corp., which will be subject to time-based or performance-based vesting criteria. EA will also assume outstanding VG Holding Corp. stock options. In addition, EA has agreed to lend VG Holding Corp. up to $35 million through the closing of the acquisition.
Transaction and Financial Information
· The acquisition is subject to customary closing conditions, including regulatory
· approvals.
· The transaction is expected to close in January 2008.
· On a GAAP basis, the acquisition is expected to be dilutive to EA’s fiscal 2008 results by approximately $0.30 to $0.40 due to non-recurring acquisition-related charges, stock-based compensation and amortization of intangible assets. This amount is a preliminary estimate based on currently-available information and is subject to change.
· On a non-GAAP basis, the acquisition is expected to be dilutive to EA’s fiscal 2008 fourth quarter results by approximately $0.05. This amount is a preliminary estimate based on currently-available information and is subject to change.
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- BioWare Unveils Dragon Age (Finally)
- MASSive Backtracking: Mass Effect NOT 360 Exclusive (But Might Be)
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3 Comments » |
on October 11, 2007 10:59 pm
wow what the hell…
feel like I was just double punched in the throat.
man…
on October 13, 2008 2:05 pm
Yeah, I hear ya. Hopefully EA will allow Pandemic and Bioware to just run the way that they are, and only just stamp the EA logo on their stuff.
on June 24, 2009 10:48 am
Cheap fioricet….
Fioricet and blood work….