Electronic Arts (NASDAQ:EA) has officially exited the public markets following the completion of a roughly $55 billion acquisition by a consortium led by Saudi Arabia's Public Investment Fund (PIF), Silver Lake, and Affinity Partners. The deal, finalized on August 4, saw all eligible shares exchanged for $210 in cash, marking the end of EA's nearly four-decade run as a publicly traded company.
The final trading price for EA was $209.70, a mere 30 cents, or 0.14%, below the cash offer, leaving minimal upside for shareholders who held until the end. The stock's last trading day was August 4, and it has since been delisted from the Nasdaq, with no further market quotes available.
Debt Load and Coupon Payments
With the acquisition complete, the focus shifts to the substantial debt taken on by the buyers. The consortium financed the deal with $9.375 billion and €1.725 billion in term loans, alongside a $500 million revolving credit facility, and issued three fixed-rate notes. EA acts as guarantor for these facilities, which are backed by nearly all of its assets.
Initial estimates indicate that the annual coupon payments on the fixed-rate notes will total approximately $505 million, based on Friday's exchange rate of $1.1561 per euro. This figure does not include interest on the term loans. The breakdown of the notes is as follows:
- Dollar secured notes maturing 2033: $2.875 billion at 7.25% – $208.4 million annual coupon
- Euro secured notes maturing 2033: €1.080 billion at 6.25% – €67.5 million annual coupon
- Dollar unsecured notes maturing 2034: $2.500 billion at 8.75% – $218.8 million annual coupon
Combined, these fixed-note coupons amount to roughly $505.2 million. For context, EA reported $2.553 billion in operating cash flow during fiscal 2026, with capital expenditures of $230 million, yielding a cash-flow proxy of $2.323 billion. The fixed-note coupons would consume about 21.7% of that amount, and they are approximately 9.5 times larger than EA's expected $53 million cash-interest payment for fiscal 2026.
Operational Challenges and Bookings Miss
The deal's closing comes amid operational headwinds. In its last public quarter, EA reported net bookings of $1.35 billion, falling 8.8% short of the $1.48 billion analyst forecast. The underperformance was partly attributed to declining user activity for Battlefield 6 following its release. This shortfall is particularly concerning given the high leverage now in place, as weaker bookings could strain the company's ability to service its debt.
In contrast, competitor Take-Two Interactive (NASDAQ:TTWO) reported bookings of $1.39 billion, surpassing expectations by 2.2%. Take-Two's shares rose 6.0% to $246.50 on Friday, with CEO Strauss Zelnick describing GTA VI preorders as "unprecedented." This divergence highlights the differing fortunes of the two gaming giants.
Revenue Mix and Live Services
EA's revenue profile provides partial support for the debt. Live services and other revenue totaled $5.383 billion over the past year, representing roughly 71% of total revenue. However, the engagement decline in Battlefield underscores the risk that maintaining recurring spending depends on keeping players engaged. CEO Andrew Wilson stated that EA is beginning its next chapter "from a position of strength," and the company recently showcased its AI-powered markerless motion capture technology, which could improve production efficiency.
What's Next for EA
The next commercial test comes with the launch of Madden NFL 27. Deluxe early access begins Monday, August 10, with a global release on Thursday. However, EA will not publish a public price to gauge initial demand or flag technical issues early, adding uncertainty.
Analysts had already priced in the deal's completion. The most recent analyst survey included four Hold ratings, with no Buy or Sell recommendations, and an average price target of $210. Firms such as D.A. Davidson, BMO Capital Markets, Argus Research, and Roth MKM all maintained Hold ratings in the days leading up to the close.
With the equity delisted, attention now turns to game engagement, bond performance, and information provided to lenders. The Nasdaq Composite climbed 1.3% on Friday, ending the week up 5.2%, but EA did not participate in that rally as its stock had already ceased trading.
Former shareholders received a fixed $210 per share. For the consortium, the new benchmark is whether bookings growth can exceed the cost of leverage. A further bookings shortfall would trigger significantly higher fixed claims, and EA's intended deregistration will further reduce public visibility into its performance.
