Electronic Arts Acquires Codemasters for $1.2 Billion

[Abu Antar]

https://news.sky.com/story/games-gi...atecrashes-725m-codemasters-takeover-12160582

Games giant Electronic Arts gatecrashes £725m Codemasters takeover
The $40bn US-based games giant EA has ignited a bidding war for Britain's Codemasters, Sky News understands.

The American computer games giant Electronic Arts (EA) has gatecrashed the £725m takeover of Codemasters, the London-listed producer of some of the world's most popular motor racing titles.

Sky News has learnt that EA has tabled a potentially knockout bid for Codemasters, trumping an offer agreed last month with Take-Two Interactive Software, maker of the Red Dead franchise.

A gaming industry source said this weekend that EA was working with bankers at UBS on its offer.

The interest from EA, which has a market value of almost $40bn, is likely to be disclosed to the stock market on Monday morning.

EA is among the world's biggest computer games developers, and is best-known for its FIFA-licensed football titles, as well as games based on the Harry Potter books and Star Wars films.

The value of EA's offer was unclear, although it is likely to be at a substantial premium to Codemasters' closing share price on Friday of 534p.

It is not certain whether Take-Two, whose market capitalisation is roughly half the size of EA's, will respond with a counterbid.

Take-Two's offer was a combination of cash and shares, meaning that the precise value of the proposals fluctuates according to changes in its own stock price in New York.

Some fund managers who own Codemasters shares have reportedly expressed dissatisfaction with the Take-Two deal because of its equity component and the comparatively modest premium it represented to the British company's undisturbed share price.

A Codemasters spokesman declined to comment, while EA could not be reached for comment.

 

[Dexter]

https://news.ea.com/press-releases/...f-Codemasters-Group-Holdings-PLC/default.aspx

Electronic Arts Reaches Agreement for Recommended Acquisition of Codemasters Group Holdings PLC
Leader in Interactive Entertainment & UK-Based Game Developer & Publisher Set to Thrill Racing Fans
December 14, 2020 02:00 AM Eastern Standard Time

REDWOOD CITY, Calif.--(BUSINESS WIRE)--Today, Electronic Arts Inc. (NASDAQ: EA) announced that it has reached an agreement with the Board of Codemasters 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 ordinary share of Codemasters with an implied enterprise value of US$1.2 billion*. The acquisition is anticipated to be completed in the first quarter of calendar 2021.

“Electronic Arts and Codemasters have a shared ambition to lead the video game racing category. The Board of Codemasters firmly believes the company would benefit from EA’s knowledge, resources and extensive global scale – both overall and specifically within the racing sector. We feel this union would provide an exciting and prosperous future for Codemasters, allowing our teams to create, launch and service bigger and better games to an extremely passionate audience,” said Gerhard Florin, the Chairman of Codemasters.

“We believe there is a deeply compelling opportunity in bringing together Codemasters and Electronic Arts 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 in a new era of racing entertainment. We have admired Codemasters’ creative talent and high-quality games for many years. With the full leverage 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 both our 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 Rationale:

• Electronic Arts believes the combination of EA and Codemasters will enable further growth and success for Codemasters and EA’s popular and innovative racing franchises.

• Bringing together the combined expertise and talent from Codemasters’ critically-acclaimed sports and racing franchises Formula One, DiRT, DiRT Rally, Grid and Project Cars with EA’s global Need for Speed franchise, fan-favorite Real Racing mobile game and EA SPORTS brands will enable our teams to innovate further, and meaningfully increase the delivery of content and experiences to a growing, global audience for racing entertainment.

• Codemasters’ deep creative talent which has produced high-quality racing games for many years, including the Formula One franchise that continues to deliver great entertainment for F1’s growing fan base.

• EA believes it can help accelerate Codemasters’ performance by leveraging EA’s deep expertise in live services operations, game analytics and technology. In addition, EA’s central services teams across development technology, art & motion capture, quality verification, compliance, and localization will all be resources available to Codemasters.

• EA’s global publishing, marketing and game development support capabilities will also strengthen Codemasters’ existing capabilities, expanding the addressable market for Codemasters’ franchises.

• The combination of Codemasters and Electronic Arts will enable the development and delivery of a market-leading portfolio of creative and exciting racing games and content to more platforms and more players around the world.

• The union also creates ongoing and expanded ways for players to engage with the combined portfolio of sports and racing games through EA’s industry-leading multi-platform subscription services.

• Bringing together Codemasters and Electronic Arts also delivers compelling financial benefit to the combined group. The acquisition is expected to grow net bookings and underlying profitability.

• Frank Sagnier, Chief Executive Officer of Codemasters, and Rashid Varachia, Chief Financial Officer of Codemasters, along with the senior executive management team of Codemasters intend to remain with Codemasters following completion of the acquisition and will continue to lead the Codemasters business within EA’s organization.

For more information on the acquisition, please visit: investor.ea.com.

*US$ equivalent values are stated at an exchange rate of US$ 1.3211:£1 on December 11, 2020. Enterprise value based on Codemasters’ audited balance sheet as of March 31, 2020.

UBS Investment Bank is acting as financial adviser to Electronic Arts and Skadden, Arps, Slate, Meagher & Flom (UK) LLP is acting as legal adviser to EA.

Jefferies International Limited is acting as financial adviser and joint-broker, and Liberum Capital Limited is acting as nominated adviser and joint-broker to Codemasters in respect of the acquisition. Gowling WLG (UK) LLP is acting as legal adviser to Codemasters.

All trademarks and copyrights contained herein are the property of their respective holders.

Forward-Looking Statements

The statements contained herein which are not historical facts are considered forward-looking statements that are subject to change. Statements including words such as “anticipate,” “believe,” “expect,” “intend,” “estimate,” “plan,” “predict,” “seek,” “goal,” “will,” “may,” “likely,” “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 management’s current expectations. Our actual results could differ materially from those discussed in the forward-looking statements. Some of the factors which could cause the Company’s results to differ materially from its expectations include the following: the impact of the acquisition’s announcement on the Company’s business and operating results; the occurrence of any circumstance or any other events that could give rise to the termination of the acquisition, or the failure to meet conditions to complete the acquisition, including the 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 managing online security and privacy; outages of our products, services and technological infrastructure; the Company’s ability to manage expenses; the competition in the interactive entertainment industry; governmental regulations; the effectiveness of the Company’s sales and marketing programs; timely development and release of the Company’s products and services; the Company’s ability to realize the anticipated benefits of acquisitions; the consumer demand for, and the availability of an adequate supply of console hardware units; the Company’s ability to predict consumer preferences among competing platforms; the Company’s ability to develop and implement new technology; foreign currency exchange rate fluctuations; general economic conditions; changes in our tax rates or tax laws; and other factors described in Part II, Item 1A of Electronic Arts’ latest Quarterly Report on Form 10-Q under the heading “Risk Factors”, as well as in other documents 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 revise or update any forward-looking statement for any reason, except as required by law.

About Electronic Arts

Electronic Arts (NASDAQ: EA) is a global leader in digital interactive entertainment. The Company develops and delivers games, content and online services for Internet-connected consoles, mobile devices and personal computers. In fiscal year 2020, EA posted GAAP net revenue of $5.5 billion. Headquartered in Redwood City, California, EA is recognized for a portfolio of critically acclaimed, high-quality 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 properties of its respective owners and used with permission.

Important notices relating to financial advisers

UBS AG London Branch is authorised and regulated by the Financial Market Supervisory Authority in Switzerland. It is authorised by the PRA and subject to regulation by the FCA and limited regulation by the PRA in the United Kingdom. UBS AG London Branch is acting as financial adviser 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 responsible to any other person for providing the protections afforded to their clients or for providing advice in relation to the acquisition, the contents of this announcement or any other matter referred to herein.

 

[Kalin]

Electronic Farts

 

[Don Peste]

Allright, this could mean we might finally have a sequel to Clive Barker's Jericho!

 

[Baron Dupek]

Now give us back Severance - Blade of Darkness to the stores.
And try to make something out of Operation Flashpoint, for once.

 

[J_C]

Now give us back Severance - Blade of Darkness to the stores.
And try to make something out of Operation Flashpoint, for once.

I'd rather have them stick to racing games.

 

[Kalin]

Should merge with Sony and make exhilarating and inspiring grazing games.

 

[Curratum]

NOOOOOOOOOOOOOOOOoooooooooooooo!

Codies got the official WRC license for a first official WRC Codies game in 2023. Now it's gonna be released under EA and will require Origin and potentially be full of MT EA shit and I will not buy it. Fucking EA.

 

[Wirdschowerdn]

Allright, this could mean we might finally have a sequel to Clive Barker's Jericho!

A sloppy remaster of Undying would be more profitable than this sorry excuse of a turd.

 

[J_C]

NOOOOOOOOOOOOOOOOoooooooooooooo!

Codies got the official WRC license for a first official WRC Codies game in 2023. Now it's gonna be released under EA and will require Origin and potentially be full of MT EA shit and I will not buy it. Fucking EA.

Look at the good side: Take Two would have been way worse. Imagine ingame commercials.

 

[d1r]

Allright, this could mean we might finally have a sequel to Clive Barker's Jericho!

.jpg

 

[karoliner]

2020 really is the worst year

 

[toro]

2020 really is the worst year

Au contraire, the chickens have come home to roost.

 

[MRY]

I'm disappointed not to see the EA mass grave meme in this thread yet.

 

[Assisted Living Godzilla]

Seems like a lot of money to buy up a studio that just does racing game. And while I like there games, they've never been the biggest on the market. Although they seem to be one of the few that's left.

This also just seems kind of weird (or maybe more funny) because EA bought up Criterion Games and haven't used them to make a racing game in over half a decade. They also somehow got RenderWare with them, the engine used to make GTA game up to San Andreas, and never used it to make a sandbox game.

 

[Wirdschowerdn]

More blood for the Blood God.

 

[racofer]

NOOOOOOOOOOOOOOOOoooooooooooooo!

Codies got the official WRC license for a first official WRC Codies game in 2023. Now it's gonna be released under EA and will require Origin and potentially be full of MT EA shit and I will not buy it. Fucking EA.

Each tire will be a separate DLC.

 

[Tehdagah]

Capitalism was a mistake

 

[Assisted Living Godzilla]

When I saw the bump I thought EA had already shut them down. I was like: Damn, that was fast.

 

[ERYFKRAD]

When I saw the bump I thought EA had already shut them down. I was like: Damn, that was fast.

Soon.

 

[IDtenT]

More blood for the Blood God.

Interesting that they're throwing Need for Speed at Codemasters.

I've been really disappointed with Codemaster's arcade racers (GRID (2019) and DIRT 5 are both puke), but it's still far better than anything coming out of NFS since the 2000s. I wish they would just go back to the formula they had for Porsche...

There's a wealth of Racing IP under EA's belt now. All of Codemasters, all of Project Cars, NFS...

 

[passerby]

There's a wealth of Racing IP under EA's belt now. All of Codemasters, all of Project Cars, NFS...

Forget about everything except for NFS, they were bought out to not compete with NFS.

 

[Wilian]

There's a wealth of Racing IP under EA's belt now. All of Codemasters, all of Project Cars, NFS...

Forget about everything except for NFS, they were bought out to not compete with NFS.

I am pretty sure there are contractual obligations to release new F1 game every year baked into the license, especially now when F1 as an organization has been pushing the e-sports scene with massive hand.

 

[passerby]

What I've meant, is that they'll trim all redundancies.

EA is all about big sport licences, so F1 will of course be made annually.

Official annual WRC, will kill Dirt and Dirt Rally series.

Project Cars and Grid will be dropped in favor of NFS ( or the other way around ).

 

[IDtenT]

Project Cars is a sim though and NFS definitely isn't.

Could definitely see GRID and NFS merging for track-based NFS titles.

WRC replacing Dirt Rally isn't too big a deal, and like their new Golf title to come out, it really does help a lot to have an official license.

Edit: EA doesn't have the WRC license, but they would certainly get it if they tried.