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Electronic Arts to buy PopCap Games for $750M, raises 1Q view but sees 2Q below analyst views
SAN FRANCISCO (AP) ' Electronic Arts Inc. said Tuesday that it will buy PopCap Games, a maker of games for smartphones and social networks, for at least $750 million.
The video game publisher also said that its first-quarter first-quarter results will be better than it anticipated but its second-quarter results will fall below analyst estimates. Its shares fell almost 4 percent in extended trading.
Redwood City-based EA will pay PopCap $650 million in cash and $100 million in common shares. PopCap, which is based in Seattle, will get up to $550 million more if it reaches certain financial milestones. And EA plans to offer PopCap employees $50 million more during the next four years in order to entice them to stay. The deal is expected to be completed in August.
If all the payouts are made, the acquisition would be EA's largest to date.
EA also said it now expects fiscal first-quarter revenue of $975 million to $1 billion and an adjusted loss of 37 cents to 40 cents per share ' better than it had predicted.
And the company forecast an adjusted second-quarter loss of 5 cents to 15 cents per share. Analysts are expecting a profit of 12 cents per share.
EA shares declined 92 cents to $23.25 in extended trading. The stock finished regular trading down 22 cents at $24.17.