EA Acquires BioWare and Pandemic Studios

Video game publisher Electronic Arts announced yesterday that it would acquire two software studios from Elevation Partners in a deal worth $860 million. This is the largest acquisition in the history of EA. The two game studios are BioWare Corporation and Pandemic Studios and are known for their action, adventure and role-playing games which include Star Wars Battlefront I/II, Mercenaries, Clone Wars, Dark Reign 2, Knights of the Old Republic, Neverwinter Nights, Baldur's Gate I/II, and MDK 2.

Electronic Arts is known for sports games like Madden NFL and also popular titles like the SIMS, but it's share of the action and role playing market has hovered at under 10 percent. As part  of the acquisition, EA will pay stockholders up to $620 million in cash and issue as much as $155 million in equity to some of the company’s employees. According to the Associated Press report, the shares will be subject to certain time- and performance-restricted vesting criteria.

EA, based in Redwood City, will take on some $50 million in unexercised stock options from the parent company of the two game studios (VG) and has agreed to lend VG up to $35 million until the deal closes.

Formerly, EA had acquired mobile game publisher Jamdat Mobile in 2006 for $680 million. BioWare and Pandemic have a total of 10 games under development including Dragon Age, Mass Effect, Sonic DS, Saboteur, Mercenaries 2: World in Flames and some other undesignated titles. The two studios employ about 800 people in California, Texas, Canada and Australia.