An interesting article from the Christian Science Monitor on the difficulty of German solar panel manufacturers sustaining a once-promising growth sector for green jobs that is being impacted by lower cost Asian products. Photo: ykanazawa1999
EA to Purchase PopCap Games
Wireless News July 16, 2011
Wireless News 07-16-2011 EA to Purchase PopCap Games Type: News
Electronic Arts announced an agreement to acquire PopCap Games, a provider of games for mobile phones, tablets, PCs and social network sites.
With titles like Plants vs. Zombies, Bejeweled, and Zuma, and a ability to create new hits, the Company said PopCap is a leader in the market for casual digital games.
“EA and PopCap are a compelling combination,” said EA CEO John Riccitiello. “PopCap’s great studio talent and powerful IP add to EA’s momentum and accelerate our drive towards a $1 billion digital business. EA’s global studio and publishing network will help PopCap rapidly expand their business to more digital devices, more countries, and more channels.”
“We picked EA because they have recast their culture around making great digital games,” said David Roberts, CEO of PopCap. “By working with EA, we’ll scale our games and services to deliver more social, mobile, casual fun to an even bigger, global audience.” go to website google iphone app
“PopCap has a proven financial trajectory with sustained revenue growth and double-digit operating margins,” said EA CFO Eric Brown. “On a non-GAAP basis, this deal is expected to be at least ten- cents accretive in fiscal year 2013.”
According to a release, PopCap is digital and social gaming company with more than 150 million games installed and played worldwide on platforms such as Facebook, RenRen, Google, iPhone, iPad and Android. In calendar year 2010, approximately 80 percent of PopCap’s revenue was on high growth digital platforms.
EA will pay approximately $650 million in cash and $100 million in shares of EA common stock to be issued to certain stockholders of PopCap. In addition, the PopCap sellers are entitled to additional variable cash consideration, contingent upon the achievement of certain non-GAAP earnings before interest and tax (“EBIT”) performance milestones through December 2013, EA’s third fiscal quarter end.
At the upper end of the earn-out, the performance targets for EBIT are approximately $343 million in total PopCap standalone EBIT generated over the two-year period through December 2013. The exact earn-out calculation is subject to adjustments. EA will also provide up to $50 million in long-term equity retention awards to PopCap employees to be granted over the next four years.
Transaction and financial highlights, as described by the Company, include:
-The transaction is expected to close in August 2011, subject to customary closing conditions, including regulatory approvals.
-On a non-GAAP basis, the acquisition is expected to be EPS neutral to EA’s fiscal year 2012 results, as a result of one-time transaction costs, and at least $0.10 accretive to EA’s FY 2013 non- GAAP EPS.
-For the first quarter of fiscal year 2012, EA is announcing preliminary results of approximately:
-$500 million to $525 million in non-GAAP revenue versus guidance of $460 million to $500 million of non-GAAP revenue.
-($0.40) to ($0.37) in non-GAAP diluted loss per share versus guidance of ($0.49) to ($0.44) in non-GAAP diluted loss per share.
-EA is reaffirming its full year fiscal year 2012 non-GAAP guidance of $0.70 to $0.90 diluted earnings per share. EA is also increasing its full year non-GAAP revenue guidance to a range of $3,800 million to $4,025 million to account for the inclusion of PopCap for a portion of FY12.
-EA is announcing preliminary guidance for the second quarter of fiscal year 2012 of non-GAAP diluted loss per share ranging from ($0.15) to ($0.05).
-EA has executed a commitment letter for a $550 million senior unsecured bridge facility with Morgan Stanley Senior Funding, Inc., J.P. Morgan Securities, J.P. Morgan Chase Bank, N.A., UBS Securities, and UBS Loan Finance, that EA may choose to draw upon prior to closing the acquisition. EA expects to explore permanent financing options in connection with the funding of this acquisition. Morgan Stanley & Co. provided EA’s board of directors valuation advice in connection with the transaction. EA was also assisted by UBS Investment Bank. web site google iphone app
In addition, the Company noted that the $600 million share repurchase program that EA announced in February, remains in effect. As of July 1, EA has repurchased 7.1 million shares for a total of $149 million under this program. EA is not obligated to repurchase any specific number of shares under the program and the repurchase program may be modified, suspended or discontinued at any time.
Electronic Arts will host a conference call on July 26, at 2 pm PT (5 pm ET) to review its results for the first quarter ended June 30, and its outlook for the future. During the course of the call, Electronic Arts may disclose material developments affecting its business and/or financial performance. Listeners may access the conference call live through the following dial-in number: 773-799- 3213 (domestic) or 888-677-1083 (international), using the password “EA” or via webcast at investor.ea.com.
Electronic Arts is a company focused on digital interactive entertainment.
PopCap is a global developer, publisher and operator of casual video games.
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