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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