Electronic Arts Confirms $750M PopCap Acquisition, $550M Earnout
Electronic Arts has confirmed earlier rumors that it would purchase Plants vs. Zombies maker PopCap by announcing a $750 million acquisition, along with a potential $550M earn-out.
EA will pay approximately $650 million in cash and $100 million in EA common stock to be issued to PopCap shareholders, the company said. In addition, the company may pay additional funds of up to $550 million based on performance milestones through 2013.
The move enhances EA's global position in the casual, social, mobile, browser and free-to-play markets, continuing forward momentum that began with its 2009 acquisition of Pet Society maker Playfish, which cost the company $400 million.
"We picked EA because they have recast their culture around making great digital games," said David Roberts, CEO of PopCap. "By working with EA, we'll scale our games and services to deliver more social, mobile, casual fun to an even bigger, global audience."
"EA and PopCap are a compelling combination," added EA CEO John Riccitiello. "PopCap's great studio talent and powerful IP add to EA's momentum and accelerate our drive towards a $1 billion digital business."
Riccitiello noted: "EA's global studio and publishing network will help PopCap rapidly expand their business to more digital devices, more countries, and more channels."
The transaction is expected to close in August, 2011.
Founded in 2000 in Seattle, PopCap Games currently houses approximately 475 employees, and was responsible for franchises that include Bejeweled, Plants vs. Zombies, Zuma, Bookworm and Peggle.
The company's franchises have been top-grossing iPhone titles and also hold significant positions on Facebook, where key titles such as Bejeweled Blitz have large followings.