Electronic Arts Will Purchase PopCap Games for $750 Million
The acquisition for the maker of "Bejeweled" and "Plants vs. Zombies" could be worth more than $1 billion if earn-out provisions pan out.
Electronic Arts said Tuesday it will pay at least $750 million for PopCap Games, the maker of Bejeweled and other casual games that had been considering an initial public offering.
EA said it will pay $650 million in cash and $100 million in stock for PopCap, which was founded 11 years ago and today employs 400 people worldwide.
PopCap makes 56 games for computers and mobile devices, including Bookworm, Peggle, Zuma, Chuzzle and Plants vs. Zombies. PopCap says it has had 41 offers to turn the latter into a movie.
“Our games are sprinkled with a whirlwind of smile-inducing awesomeness,” PopCap proclaims at its website, where it also says a sale of Bejeweled occurs once every 4.3 seconds.
The deal, which should close next month, includes “earn-out” provisions that could drive the purchase price $550 million higher over the next two years.
Included in EA’s announcement that it would acquire PopCap was guidance that it would exceed revenue expectations but it would also experience an unexpected per-share loss during the current quarter.
Shares of EA closed fractionally lower to $24.17 on Tuesday, but were off an additional 3% in the after-hours session when the acquisition and updated earnings guidance were made public.