EA Acquires PopCap After Zynga Offered $1 Billion

Posted Jul 17, 2011

Electronic Arts Inc. (NASDAQ:ERTS) has bought PopCap Games, an online gaming company. EA spent $650 million in cash and $100 million in stock. PopCap is also eligible to receive $550 million in earnouts over the next couple of years. EA out-bid Zynga for the deal. Zynga reportedly offered PopCap $1 billion.

PopCap shareholders will not receive anything in earnouts if the company earns $91 million or less in EBIT through December 2013. If PopCap hits $343 million or more during that same period, then shareholders can make $550 million in earnouts.

PopCap started in 2000 and currently has 400 employees. The company’s headquarters are in Seattle, Washington.