Electronic Arts to Acquire Jamdat Mobile
The $680 million deal makes EA a major player in the mobile market...
Console gaming giant Electronic Arts announced today the acquisition of mobile gaming giant Jamdat. The $680 million deal has EA paying $27 in cash per share of Jamdat common stock. This represents a significant premium for the stock, which closed at $22.77. After hours trading has appropriately boosted Jamdat shares to $26.95.
EA's Mobile Aspirations
Rumors have been flying about possible mergers and acquisitions since EA Mobile General Manager John Batter gave a keynote speech during GDC outlining the company's commitment to dive headfirst into the mobile scene in 2005, with 15-20 titles planned for the year, and rapid growth planned.
Initially EA was named in a possible takeover bid of U.K.-based mobile publisher Superscape, and less than a week later strong rumors surfaced that the publishing juggernaut was in talks to acquire Jamdat. While it is unknown whether acquisition talks had indeed taken place at that time, Batter made it clear to Modojo in a July interview that the company wasn't discouraging such chatter.
"We always keep that option available, and would certainly consider an acquisition in the mobile space if the right situation came along," Batter said.
"We aren't averse to the idea. People are aware that EA has a history of acquiring companies when it is beneficial, so that probably contributes to this current speculation," he said regarding the Jamdat rumor.
Creates Powerful Mobile Presence
The deal, expected to be finalized by the end of Q1, creates a significant new presence in the mobile market. The companies announced plans to publish over 50 mobile titles in the next 12 months, including EA sports mainstays Madden and FIFA, and popular Jamdat franchises Tetris, Bejeweled, and Jamdat Bowling.
"We think the combination of EA and Jamdat will benefit our shareholders," Jamdat Chairman and Chief Executive Officer Mitch Lasky said. "The combination of EA and EA Sports, along with Jamdat's casual blockbusters like Tetris, Bejeweled and Jamdat Bowling, will create a powerful product line-up."
Upon final shareholder approval and other standard closing conditions, EA Mobile and Jamdat will be combined into one team, to be led by Lasky. Other organizational details, including other executive shuffling and what (if anything) will become of the Jamdat brand were not divulged.
"We decided we wanted to move really fast on this, so we joined with the leader in North America to enable our content to be deployed on mobile phones more aggressively here and globally," EA chairman and chief executive officer Larry Probst, told the AP.
Scooping up Opportunities
Although all video game publishers make strategic acquisitions to enhance their portfolio and otherwise strengthen their position within the market, during this console generation EA has developed a reputation as a publisher especially fond of gobbling up smaller companies, beginning in 1997 with their acquisition of Maxis, and the Sims dynasty that went along with it.
Other notable EA acquisitions include Tiburon and Westwood in 1998, Dreamworks Interactive in 2000, Criterion in 2004, and Digital Illusions (DICE) earlier this year.