Electronic Arts (NSDQ: ERTS) has agreed to pay $860 million to acquire VG Holdings, the parent of video game producers BioWare and Pandemic Studios, the WSJ reports. The deal is EA’s largest and will add six more video games to the 10 EA is currently developing. The acquisition, which follows last week’s acquisition of gaming apps provider Super Computer International, reflects EA’s strategy of maintaining the rights of the games it publishes, rather than sharing ownership with outside parties like film studios.
Under the terms of the deal, which was negotiated by Elevation Partners, EA will give VG’s stockholders up to $620 million in cash, with $155 million in equity to certain of its employees, based on performace.
One interesting side note: John Riccitiello, who returned as EA’s CEO in April after three years, helped found Elevation. So when EA was in the middle of negotiating with Elevation, Riccitiello recused himself from the talks to avoid the appearance of conflict. Citing an unnamed source, the Journal said that Elevation received a return of about two times its original investment of $300 million on the deal.