As motivations for the acquisition, Jensen listed the need to fill gaps in EA's portfolio of games--specifically with BioWare's RPGs and Pandemic's open-world titles--as well as EA's interest to further support MMO development with BioWare's upcoming massively multiplayer project. And of course, EA expects to make gobs of money from the purchase.
"In fiscal 2009 and 2010, we expect the BioWare and Pandemic properties to deliver revenue in excess of $300 million annually," he said.
EA CEO and former Elevation Partners CEO John Riccitiello addressed his involvement in the deal, conceding that the acquisition is "likely to result in a personal financial benefit at some time in the near future," and saying an independent party would be involved to ensure fair play for investors' sakes.
Addressing an analyst's question about the logistics of the acquisition, EA Games president Frank Gibeau said neither BioWare's nor Pandemic's studios would be altered in any way. "These are extremely strong studios in their own right," Gibeau said. "Inside of our label structure, they're going to be maintaining their autonomy and their cultural independence."
Original story: Redwood City-headquartered Electronic Arts today announced its acquisition of VG Holding Corp., the owner of Mass Effect (X360) developer BioWare and Mercenaries series creator Pandemic Studios. EA reached the agreement with investment firm Elevation Partners, who bought controlling interest in both studios and formed VG Holding Corp. shortly thereafter in 2005.
"These are two of the most respected studios in the industry and I'm glad to be working with them again. They'll make a strong contribution to our strategic growth initiatives on quality, online gaming and developing new intellectual properties," said EA CEO John Riccitiello in the announcement. "We also expect this will drive long-term value for our shareholders."
A cofounder of Elevation Partners, Riccitiello served as the firm's managing director before returning to EA as CEO earlier this year, making the buyout no surprise as it comes between intimate bedfellows. The acquisition will be completed in January of next year, and requires EA to pay up to $620 million to VG Holding Corp.'s stockholders.
EA will also pay $155 million in equity to VG Holding Corp. employees and assume all outstanding VG Holding Corp. stock options. The Bioware/Pandemic owner itself will receive a loan of $35 million from EA to complete the acquisition.
I'm gonna start crying