September 17, 2019

DealBook: Electronic Arts to Buy PopCap Games

NCAA Football 12 by EA Sports and Plants vs. Zombies by PopCap.EA Sports and PopCap GamesNCAA Football 12 by EA Sports and Plants vs. Zombies by PopCap.

8:24 p.m. | Updated

A deal by Electronic Arts to bolster its presence in the mobile and casual gaming industry could be its biggest acquisition yet.

The company said on Tuesday that it had agreed to buy PopCap Games, the maker of games like Plants vs. Zombies and Bejeweled, for at least $750 million in cash and stock.

If PopCap hits certain earnings targets through December 2013, its current owners could reap up to $550 million in additional payments, making the deal the largest Electronic Arts has ever struck.

Though Electronic Arts has long been a major force in console gaming with offerings like the Madden NFL series, it has sought a larger share of the rapidly growing world of mobile and casual games, including those played on iPhone and Android devices.

Founded in 2000, PopCap scored its first hit quickly with Bejeweled, a puzzle game. In 2007, it began expanding into casual games, a hot sector that also includes the likes of Zynga, with a series of acquisitions.

In a statement, John Riccitiello, Electronic Arts chief executive, praised PopCap’s studio talent and intellectual property. “E.A.’s global studio and publishing network will help PopCap rapidly expand their business to more digital devices, more countries and more channels.”

PopCap said that its games had been downloaded 1.5 million times and that it employed 475 people across the world.

In 2009, the company raised $22.5 million, led by Meritech Capital Partners.

Under the terms of the deal, Electronic Arts will pay about $650 million in cash and $100 million in new shares. As long as PopCap earns more than $91 million in certain kinds of earnings over the next two years, its current owners will be paid under the earn-out provision. Reporting at least $343 million in earnings before interest and taxes will qualify for the full $550 million payout.

The deal is expected to close in the third quarter. Electronic Arts said it expected the takeover to add to its earnings starting in 2013.

Shares of Electronic Arts fell 3.3 percent in after-market trading to $23.38 .

Electronic Arts has secured $550 million in bridge financing from Morgan Stanley, JPMorgan Chase and UBS. Electronic Arts was advised by Morgan Stanley and UBS.

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The Gossip Machine, Churning Out Cash

Mr. Lohan was hardly morose about his own legal troubles. His hotel room and the hallway outside it buzzed with giddy deal-making as he and his entourage, which included two beefy, bejeweled bodyguards, conducted business with the door open. It could all be overheard by passers-by — or, by coincidence, a New York Times reporter staying in a room across the way.

An associate of Mr. Lohan’s ran through the plan: ignite a bidding war between TMZ and its rival Web site Radar for Mr. Lohan’s side of the story and for embarrassing recordings he claimed to have of his fiancée, Kate Major. “What you have to do is monetize this,” the associate said, adding, “What you want is to make them pay for that exclusivity.”

Sure enough, Radar went on to post four “exclusives” quoting Mr. Lohan denying the charges and threatening to release tapes of Ms. Major.

This is how it works in the new world of round-the-clock gossip, where even a B-list celebrity’s tangle with the law can be spun into easy money, feeding the public’s seemingly bottomless appetite for dirt about the famous.

A growing constellation of Web sites, magazines and television programs serve it up minute by minute, creating a river of cash for secrets of the stars, or near-stars. An analysis of advertising estimates from those outlets shows that the revenue stream now tops more than $3 billion annually, driving the gossip industry to ferret out salacious tidbits on a scale not seen since the California courts effectively shut down the scandal sheets of the 1950s.

It all kicked in with a vengeance last week when news broke that former Gov. Arnold Schwarzenegger of California had fathered a child with his family’s housekeeper.

Radar was the first to reveal the mother’s identity, in a joint report with Star magazine. TMZ quickly flooded its site with her pictures. Several gossip outlets were prepared to bid big dollars for any new video or photographs of the mistress.

On Friday, TMZ posted the most confidential document of the entire affair: the bank form that Mr. Schwarzenegger signed last year giving her a down payment for her house.

“I don’t know who got ahold of it and how they got ahold of it,” said the mortgage broker involved in the sale, David Rodriguez.

This new secrets exchange has its own set of bankable stars and one-hit wonders, high-rolling power brokers and low-level scammers, many of whom follow a fluid set of rules that do not always comport with those of state and federal law, let alone those of family or friendship.

Now there is a growing effort to stop the flow of private information. In the past few years, a federal Department of Justice team in Los Angeles has conducted a wide-ranging investigation into illegal leaks of celebrity health records and other confidential files, according to officials involved. Working in secret, they have plumbed cases involving Tiger Woods, Britney Spears and Farrah Fawcett, among others.

That inquiry is just one of at least six here into whether workers at hospitals, the coroner’s office or the Police Department have accepted money for private information, according to officials, most of whom spoke on the condition of anonymity.

But payment often comes in cash, making it hard to track, officials say, and new laws meant to plug the geyser, many of them promoted by Mr. Schwarzenegger, have hardly worked. “Sometimes I think we’re losing,” one investigator said.

Increasingly, celebrities are not just victims. With only so many big-time personalities in rehab, facing indictment or — á la Charlie Sheen — in public crack-up mode, a raft of reality stars, former reality stars and would-be reality stars have filled the breach with attention-grabbing antics of their own.

Kitty Bennett contributed research.

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