REDWOOD CITY, Calif. -
Electronic Arts Inc., the video game developer known for titles such as "Madden NFL" and "The Sims," said Thursday it will acquire two software studios from Elevation Partners in a deal worth up to $860 million.The studios, BioWare Corp. and Pandemic Studios, have a total of 10 games under development. Elevation owns their parent, VG Holding Corp.
Together, the studios employ about 800 people in Los Angeles and Austin, Texas, as well as in Canada and Australia.
Under the terms of the deal, EA will pay VG stockholders up to $620 million in cash and issue as much as $155 million in equity to some of the company's employees. The shares will be subject to certain time and performance-restricted vesting criteria.
In addition, EA will assume outstanding VG Holding Corp. stock options, and has agreed to lend VG up to $35 million until the deal closes.
Microsoft Corp. is planning to publish BioWare's Mass Effect game next month, and the studio is in the early stages of developing a multiplayer
online game, EA said. Pandemic is planning to release "Mercenaries 2: World in Flames" and "Saboteur."
The acquisition, which is subject to customary closing conditions and regulatory approval, is expected to close in January.
EA expects the deal to lower its 2008 earnings by about 30 to 40 cents per share. EA shares fell $1.22, or 2 percent, to close at $58.69 Thursday.
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