Electronic Arts announced an agreement to acquire the Titanfall series developer Respawn Entertainment that is currently working on a new Titanfall title and a game set in the Star Wars universe as well as a new VR gaming experience.
Here are some quotes from CEOs of EA and Respawn:
“We’ve seen firsthand the world-class caliber of Respawn as a development studio with incredible vision, deep talent and an inspiring creative mindset,” said Andrew Wilson, CEO of Electronic Arts. “Our longtime partnership is grounded in a shared desire to push the boundaries and deliver extraordinary and innovative new experiences for players around the world. Together, we’ve brought this to life in the Titanfall franchise, and now with the Respawn team joining EA, we have exciting plans to accomplish even more amazing things in the future.”
“We started Respawn with the goal to create a studio with some of the best talent in the industry, and to be a top developer of innovative games,” said Vince Zampella, CEO of Respawn Entertainment. “We felt that now was the time to join an industry leader that brings the resources and support we need for long term success, while still keeping our culture and creative freedom. EA has been a great partner over the years with Titanfall and Titanfall 2, and we’re excited to combine our strengths. This is a great next step for Respawn, EA, and our players.”
Under this new agreement, EA will pay $151 million in cash, and up to $164 million in long-term equity in the form of restricted stock units to employees for the next four years. Additionally, EA may be required to pay further cash with consideration that is contingent upon achievement of certain performance milestone through the end of calendar 2022. This additional consideration is limited to a maximum of $140 million.
We can expect the transaction to take place sometime by the end of 2017 or soon afterwards. The acquisition is expected to be neutral to EA’s net income in fiscal years 2018 and 2019.