Popcap purchase to cost EA $650 million in cash plus more in stock

Late last month I mentioned that a rumor was circulating that EA would be purchasing Popcap for about $1 billion. The purchase rumor has come true with EA going official with its plan to purchase Popcap for $650 million in cash. EA will also give $100 million in common stock for the purchase and the expenses continue.

The deal also has a multi-year earn-out that could cost EA an additional $343 million if the upper end of the earn-out target is met. Other money spent for the purchase also includes $50 million that will be given in long-term retention awards for Popcap employees to be paid over four years. EA hopes to complete the purchase in August, but notes the deal is subject to closing conditions and to regulatory approvals.

EA expects the purchase to make for a loss of five to 15 cents per share in fiscal 2012. The bulk of the purchase was funded via an unsecured bridge facility of $550 million from a number of investors including Morgan Stanley Senior Funding, JP Morgan Securities, and J.P. Morgan Chase Bank among others.

[via Android Community]