Saudi Arabia's Public Investment Fund, Silver Lake, and Affinity Partners closed a $36 billion all-cash acquisition of Electronic Arts, removing the maker of FIFA, Madden, and Apex Legends from public markets in the second-largest leveraged buyout of a U.S. technology company on record. The consortium paid a reported 12% premium to EA's thirty-day volume-weighted average price, with PIF contributing roughly $19 billion in equity and Silver Lake anchoring the remainder alongside Affinity, the vehicle run by Jared Kushner.
EA's board unanimously approved the transaction after a four-month negotiation that began with a non-binding proposal in December. The deal values EA at approximately 5.8x trailing twelve-month revenue of $6.2 billion, a multiple that sits between Activision Blizzard's $69 billion Microsoft acquisition at 6.1x and Take-Two's $12.7 billion Zynga purchase at 3.9x. EA generated $1.8 billion in adjusted EBITDA over the last fiscal year, implying a 20x EBITDA multiple that reflects the consortium's willingness to pay for stable, recurring revenue from Ultimate Team modes and live-service franchises. Silver Lake's gaming portfolio already includes stakes in Endeavor Group, Fenway Sports Group, and previously Unity Software, while PIF has deployed over $38 billion into gaming assets since 2021, including a $3 billion stake in Nexon and full ownership of SNK Corporation.
The privatization removes quarterly earnings pressure from a studio facing margin compression in packaged goods and rising development costs on next-generation titles. EA's operating margin contracted 180 basis points year-over-year to 16.4% as the company delayed multiple AAA releases and absorbed writedowns on cancelled projects. Private ownership allows the consortium to restructure EA's portfolio without public market penalty, likely consolidating development teams, sunsetting underperforming franchises, and accelerating mobile expansion in markets where PIF holds strategic interest. Saudi Arabia's Savvy Games Group, a PIF subsidiary, has committed $38 billion to building a domestic gaming industry by 2030, and vertical integration with a Western publisher offers immediate access to IP, talent, and distribution infrastructure. The deal also de-risks EA from activist pressure that intensified after the company's $2 billion failed pursuit of a merger with NBCUniversal's entertainment assets in 2023.
Allocators should watch three follow-on events: first, PIF's deployment of EA IP into Saudi-based development studios and esports infrastructure, likely announced within six months as the kingdom prepares to host the Esports World Cup in July; second, Silver Lake's refinancing of acquisition debt, estimated at $12-14 billion, which will test leveraged loan markets already digesting $89 billion in new LBO paper year-to-date; third, regulatory response from the Committee on Foreign Investment in the United States, which approved the transaction but may impose monitoring conditions on data handling and user privacy given PIF's sovereign status. EA's 9,000-person workforce will remain largely intact under the consortium's stated operational plan, though studio consolidation typically begins twelve to eighteen months post-close once integration teams complete asset mapping.
The transaction confirms that sovereign wealth funds will pay full-cycle pricing for scarce, profitable IP in sectors where domestic development remains subscale.
The takeaway
Sovereign wealth meets Silicon Valley: PIF's $36B EA privatization prices gaming IP at 20x EBITDA, setting floor for live-service multiples.
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