Nasdaq-listed game developer and publisher Electronic Arts (EA) announced that it has reached an acquisition agreement with the board of directors of U.K.-based racing game developer and publisher Codemasters. With the agreement, EA trumps its also Nasdaq-traded competitor Take-Two Interactive Software, which previously came to an agreement with Codemasters on preliminary acquisition terms. The acquisition is anticipated to be completed in Q1 2021.
While Take-Two’s offer put Codemasters’ valuation at approximately $980M USD, Codemasters’ new agreement with EA raises its implied enterprise value to roughly $1.2B as Codemasters’ existing shareholders will be entitled to receive £6.04 GPB ($8.08) in cash for each ordinary share of the company.
Codemasters is primarily known for its racing games, including the officially licensed F1 game franchise, driver journey-focused simulator Project Cars 3, and recently launched story-driven off-road racing game DIRT 5. The acquisition will add Codemasters’ racing games to EA’s racing game portfolio, which includes several arcade racing games such as the Nedd for Speed franchise.
EA expects to financially benefit from the acquisition as the company anticipates growth of net bookings and underlying profitability driven by the transaction. Codemasters’ current CEO Frank Sagnier and CFO Rashid Varachia, along with the company’s senior executive management team, intend to remain with Codemasters in their positions following completion of the acquisition.
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