Gamasutra: The Art & Business of Making Gamesspacer
View All     RSS
November 20, 2018
arrowPress Releases
  • Editor-In-Chief:
    Kris Graft
  • Editor:
    Alex Wawro
  • Contributors:
    Chris Kerr
    Alissa McAloon
    Emma Kidwell
    Bryant Francis
    Katherine Cross
  • Advertising:
    Libby Kruse

If you enjoy reading this site, you might also want to check out these UBM Tech sites:

Analyst: EA's PopCap Acquisition 'A Long-Term Positive'

Analyst: EA's PopCap Acquisition 'A Long-Term Positive'

July 13, 2011 | By Mike Rose

Following news that Electronic Arts has acquired Plants vs. Zombies maker PopCap for $750 million, Wedbush analyst Michael Pachter described the move as "a long-term positive," although he noted that "EA's acquisition history has been uneven."

PopCap and EA announced yesterday that EA will buy PopCap for approximately $650 million in cash and $100 million in EA common stock to be issued to PopCap shareholders. In addition, EA may pay additional funds of up to $550 million based on performance milestones through 2013.

Analyst Michael Pachter of Wedbush noted that the acquisition "has the potential to be transformative," explaining that PopCap may potentially contribute more than $343 million to EA during the 2012-2013 fiscal year.

However, he did also acknowledge that, should PopCap fail to achieve its past levels of performance, it may contribute more along the lines of $91 million over the next two years, meaning that EA will have paid far too much for the acquisition.

Pachter warns that, if this were to happen, EA investors would be "unforgiving."

The analyst said that in order for PopCap's former management to hit the "high end" of the potential $550 million earnout, the company will have to generate close to $800 million over 2012 and 2013.

Pachter noted that PopCap "is a great strategic fit" for EA, and even if the deal was to generate at the low end of the earn-out range, it "would not be a disaster," as it offers the company some protection.

Related Jobs

Playful Corp
Playful Corp — McKinney, Texas, United States

UI Designer
Insomniac Games
Insomniac Games — Burbank, California, United States

Senior Environment Technical Artist
Playful Corp
Playful Corp — McKinney, Texas, United States

FX Artist
Snowcastle Games
Snowcastle Games — Oslo, Norway

Gameplay Programmer

Loading Comments

loader image