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REDWOOD CITY, California – (BUSINESS WIRE) – Today, Electronic Arts Inc. (NASDAQ: EA) announced that it has reached an agreement with the Codemasters Board for the recommended acquisition of Codemasters, the UK-based game developer and publisher. In the transaction, Codemasters shareholders will be entitled to receive 604 pence (approximately US $ 7.98 *) in cash for each Codemasters common share with an implied business value of US $ 1.2 billion *. The acquisition is expected to be completed in the first quarter of calendar 2021.
“Electronic Arts and Codemasters share an ambition to lead the video game racing category. The Codemasters Board strongly believes that the company would benefit from EA’s knowledge, resources and broad global scale, both generally and specifically within the racing industry. We believe that this union would provide an exciting and prosperous future for Codemasters, allowing our teams to create, launch and service bigger and better games for an extremely passionate audience. ” said Gerhard Florin, president of Codemasters.
“We believe there is a profoundly compelling opportunity in bringing Codemasters and Electronic Arts together to create amazing and innovative new racing games for fans. Our industry is growing, the racing category is growing, and together we will be positioned to lead a new era of racing entertainment. We have admired Codemasters’ creative talents and high-quality games for many years. Taking full advantage of EA’s technology, platform expertise and global reach, this combination will allow us to grow our existing franchises and deliver more industry-defining racing experiences to a global fan base. We are pleased that our two boards of directors are recommending this transaction and we look forward to welcoming such an exciting and talented team to the Electronic Arts family. ” said Andrew Wilson, CEO of Electronic Arts.
Strategic justification:
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Electronic Arts believes that the combination of EA and Codemasters will allow further growth and success for Codemasters and EA’s popular and innovative racing franchises.
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Combining the expertise and talents of critically acclaimed racing and sports franchises from Codemasters, Formula One, DiRT, DiRT Rally, Grid and Project Cars with EA’s global Need for Speed franchise, the Real mobile game Fan-Favorite Racing and Brands EA SPORTS will enable our teams to further innovate and significantly increase the delivery of content and experiences to a growing global audience for racing entertainment.
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The deep creative talent of Codemasters that has produced high-quality racing games for many years, including the Formula One franchise that continues to provide great entertainment for the growing F1 fan base.
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EA believes it can help accelerate Codemasters performance by leveraging EA’s deep experience in live service operations, game analytics, and technology. Additionally, EA’s core services teams in development technology, motion capture and art, quality assurance, compliance, and localization will be available resources to Codemasters.
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EA’s global game development, marketing and publishing support capabilities will also strengthen Codemasters’ existing capabilities, expanding the addressable market for Codemasters franchises.
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The combination of Codemasters and Electronic Arts will enable the development and delivery of a market-leading portfolio of creative and exciting racing content and games to more platforms and more players around the world.
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The syndicate also creates ongoing and expanded ways for gamers to engage with the combined portfolio of sports and racing games through EA’s industry-leading cross-platform subscription services.
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The merger of Codemasters and Electronic Arts also offers a compelling financial benefit for the combined group. The acquisition is expected to increase net reserves and underlying performance.
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Frank Sagnier, Chief Executive Officer of Codemasters, and Rashid Varachia, Chief Financial Officer of Codemasters, along with Codemasters’ senior executive management team intend to remain with Codemasters upon completion of the acquisition and will continue to lead the Codemasters business within the organization by EA.
For more information on the acquisition, visit: investor.ea.com.
* Equivalent US dollar values are stated at an exchange rate of US $ 1.3211: £ 1 on December 11, 2020. Business value based on Codemasters audited balance sheet as of March 31, 2020.
UBS Investment Bank acts as financial advisor to Electronic Arts and Skadden, Arps, Slate, Meagher & Flom (UK) LLP acts as legal advisor to EA.
Jefferies International Limited is acting as joint financial advisor and broker, and Liberum Capital Limited is acting as appointed advisor and joint broker to Codemasters with respect to the acquisition. Gowling WLG (UK) LLP acts as legal advisor to Codemasters.
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Forward-looking statements
Statements in this document that are not historical facts are considered forward-looking statements that are subject to change. Statements that include words like “anticipate”, “believe”, “expect”, “intend”, “estimate”, “plan”, “predict”, “seek”, “goal”, “will”, “may”, ” probably, “” should “,” could “(and the negative of any of these terms),” future “and similar expressions also identify forward-looking statements. These forward-looking statements are not guarantees of future performance and reflect current expectations of management Our actual results could differ materially from those discussed in the forward-looking statements. Some of the factors that could cause the Company’s results to differ materially from your expectations include the following: the impact of the announcement of the acquisition on operating and business of the Company; the occurrence of any circumstance or any other event that could lead to the termination of the acquisition, or to the breach of the conditions to complete the acquisition, incl following receipt of all necessary regulatory approvals; the Company’s ability to successfully integrate Codemasters operations and employees; the impact of the COVID-19 pandemic, sales of the Company’s products and services; the Company’s ability to develop and support digital products and services, including online security and privacy management; outages of our products, services and technological infrastructure; the Company’s ability to manage expenses; competition in the interactive entertainment industry; government regulations; the effectiveness of the Company’s marketing and sales programs; timely development and launch of the Company’s products and services; the Company’s ability to obtain the anticipated benefits of acquisitions; consumer demand and the availability of an adequate supply of console hardware units; the Company’s ability to predict consumer preferences between competing platforms; the Company’s ability to develop and implement new technology; fluctuations in the exchange rate of foreign currency; general economic conditions; changes in our tax rates or tax laws; and other factors described in Part II, Item 1A of the latest Electronic Arts Quarterly Report on Form 10-Q under the heading “Risk Factors”, as well as in other documents that we have filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended March 31, 2020.
These forward-looking statements are current as of December 13, 2020. Electronic Arts assumes no obligation to review or update any forward-looking statement for any reason, except as required by law.
About Electronic Arts
Electronic Arts (NASDAQ: EA) is a world leader in digital interactive entertainment. The Company develops and offers online games, content and services for Internet-connected consoles, mobile devices and personal computers. In fiscal 2020, EA posted GAAP net income of $ 5.5 billion. Headquartered in Redwood City, California, EA is renowned for a portfolio of high-quality, critically acclaimed brands such as EA SPORTS ™ FIFA, Battlefield ™, Apex Legends ™, The Sims ™, Madden NFL, Need for Speed ™, Titanfall ™ and Plants vs. Zombies ™. More information about EA is available at www.ea.com/news.
EA SPORTS, Ultimate Team, Battlefield, Apex Legends, The Sims, Need for Speed, Titanfall, and Plants vs. Zombies are trademarks of Electronic Arts Inc. Madden, NFL and FIFA are the property of their respective owners and are used with permission.
Important Notices Regarding Financial Advisors
UBS AG London Branch is authorized and regulated by the Swiss Financial Market Supervisory Authority. It is authorized by the PRA and subject to regulation by the FCA and limited regulation by the PRA in the UK. UBS AG London Branch is acting as financial advisor to EA and no one else in connection with the acquisition. In connection with such matters, UBS AG London Branch, its affiliates and their respective directors, officers, employees and agents will not regard any other person as their client, nor will they be liable to any other person for providing the protections afforded to their clients. or to provide advice regarding the acquisition, the content of this announcement or any other matter referred to in this document.
