The $55 billion buyout was officially finalized this Tuesday, but what really makes this deal stand out isn't the price tag — it's the $20 billion in debt the buyers took on to make it happen. This marks the largest leveraged buyout in history, and as Electronic Arts returns to being a private company, the price it pays will be years of paying down that debt.
The deal was first announced last September, and after shareholder approval and clearing the final regulatory hurdle last week, the whole process took nearly a year — several months longer than the buyers had originally expected. Saudi Arabia's Public Investment Fund (PIF) now holds over 93% of EA's shares, with private equity firm Silver Lake and Affinity Partners rounding out the new ownership group.
Leadership at the top hasn't changed along with the ownership. Andrew Wilson remains CEO, and EA's headquarters stays put in Redwood City, California. In a letter to employees, Wilson reiterated that the company will continue building "the world's best games, communities, and creative culture" — nice words, but the real challenge ahead is figuring out how to manage that $20 billion in financing debt under the new private structure.
The numbers tell a stark story: in its most recent fiscal quarter (ending June 30), EA's net income after operating expenses and taxes was $387 million. A company earning less than $400 million in a single quarter is now carrying $20 billion in fresh debt — and how that math works out will be the key thing to watch going forward.
