Electronic Arts: Record-Setting $55bn LBO
Hunter Martin, CFA - Head of Media/Cable, CreditSights
Brian McKenna - Analyst, Telecom & Media/Cable, CreditSights
9 October 2025
Insights into Electronic Arts $55 Billion LBO analysis, including:
- Record-Setting Gaming Buyout: Dive into the details of Electronic Arts’ unprecedented $55 billion all-cash sale to a consortium led by PIF, Silver Lake, and Affinity Partners, setting a new benchmark for gaming sector LBOs.
- Leverage & Debt Structure: Uncover how $20 billion in committed debt financing translates to approximately 6x gross leverage at closing, with JPMorgan as the sole lender.
- Bondholder Protection & Uncertainty: Explore key insights on EA’s Change of Control (CoC) put rights at 101 and the nuances around the Ratings Event requirement affecting existing notes.
- Regulatory & CFIUS Risk Spotlight: Learn why the CFIUS review is the primary risk to deal completion, especially given the involvement of Saudi Arabia’s PIF and the regulatory precedent set by Microsoft’s Activision Blizzard acquisition.
- Electronic Arts $55 Billion LBO Analysis – Valuation & Premium: See how the transaction’s $210/share price offers a ~25% premium to unaffected share price, and why the market is pricing in high deal completion probability.
Executive Summary
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EA agrees to $55 billion, all-cash sale to investor consortium comprised of PIF, Silver Lake and Affinity Partners.
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$20 billion in committed debt financing implies ~6x gross leverage at close.
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We reiterate our view that EA’s existing notes will be protected by the CoC put rights at 101, although there is some uncertainty related to the Rating Event requirement.
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CFIUS review is primary risk to deal completion.
EA agrees to $55 billion, all-cash sale to investor consortium comprised of PIF, Silver Lake and Affinity Partners. Electronic Arts’ (EA: Baa1/BBB+/A-) announced on Monday morning that it has entered into a definitive agreement to be acquired by an investor consortium led by Saudi Arabia’s Public Investment Fund (PIF), Silver Lake and Affinity Partners at a ~$55 billion EV (~18x EV/EBITDA). The all-cash transaction at $210 per share is a ~25% premium to EA’s unaffected share price and is ~17% above EA’s previous all-time high. The stock is trading at ~$203 at the time of publication, or only ~3% below the transaction price, implying a high likelihood that the deal will close. The possibility of an LBO was first reported by the WSJ on Friday (9/26).
$20 billion in committed debt financing implies ~6x gross leverage at close. The transaction was approved by EA’s Board of Directors, is expected to close in Q1 FY27 (quarter ending June 2026) and is subject to customary closing conditions, including receipt of required regulatory approvals and approval by EA stockholders. The deal will be funded by a combination of cash from each of PIF, Silver Lake and Affinity Partners, as well as the roll-over of PIF’s existing ~10% stake. The transaction structure includes $20 billion of debt financing, fully and solely committed by JPMorgan, of which $18 billion is expected to be funded at close. We believe the $2 billion differential is attributable to EA’s cash build between now and closing. We estimate this implies ~6x gross leverage using our forecast fiscal 2027E EBITDA of ~$3.1 billion. Each of PIF, Silver Lake, and Affinity Partners plan to fund the equity component of the financing entirely from capital under their respective control.
