P.E. Firm Providence Equity Partners Looking Into Electronic Arts Acquisition

Posted Aug 17, 2012

Providence Equity Partners is a private equity company that focuses on entertainment and information.  The company is known for their noteworthy leveraged buyouts (known as LBOs) and growth capital investments.  Providence has invested in over 100 companies since 1989 and has funds with over $22 billion in equity commitments.  Some of their investments include AutoTrader.com (25%), MGM, Hulu, WhitePages, and MetroNet.  Now Providence is looking at video game conglomerate, Electronic Arts.

Electronic Arts is known for developing popular games like FIFA and Madden NFL.  EA also owns PopCap Games, the company behind “Bejeweled” and “Plants Vs. Zombies.”  EA has a solid grasp on the MMORPG community by developing games like “Star Wars: The Old Republic.”  And after EA bought Maxis, they started really developing simulation games like “The Sims.”

This acquisition would add to Providence’s already existing video game arsenal.  Providence is a major investor in ZeniMax, the company that develops games like Skyrim, Fallout, Doom, and Quake.  One of the biggest problems EA is dealing with is a 37% loss of market cap throughout 2012.  Now EA is valued at just over $4 billion.  EA is currently trading at $13 per share and they have made it clear that they would be willing to accept an acquisition at $20 per share.

Rumor has it that Kohlberg Kravis and Roberts has an interest in an Electronic Arts acquisition too.