EA announces an agreement that they are to acquire Respawn Entertainment, LLC, developer of shooter and action games including the award-winning Titanfall franchise. The acquisition builds on a successful publishing partnership between Respawn and EA, with multiple projects currently in development – a new title in the Titanfall franchise, a game set in the Star Wars universe and a VR gaming experience.
As for Respawn, their goal is to create a studio given its asset of creative talents to be the best developer of innovative games and in order to compete in the future, Respawn aims to partner with a global industry leader like EA. Respawn says EA has been a great development partner that supported in past projects and to gain access to EA’s resources and new technologies will give Respawn the edge it needs for future growth. Respawn will still be managed separately and will work as part of EA’s studio leadership team. Respawn also affirms there will be no layoffs or major organizational changes.
A statement from Vince Zampella, CEO of Respawn Entertainment
“We started Respawn with the goal to create a studio with some of the best talents in the industry, and to be a top developer of innovative games. We felt that now was the time to join an industry leader that brings the resources and support we need for long-term success, while still keeping our culture and creative freedom. EA has been a great partner over the years with Titanfall and Titanfall 2, and we’re excited to combine our strengths. This is a great next step for Respawn, EA, and our players.”
EA will pay $151 million in cash, and up to $164 million in long-term equity in the form of restricted stock units to employees, which will vest over four years as agreed. In addition, EA may be required to pay additional variable cash consideration that is contingent upon achievement of certain performance milestones, relating to the development of future titles, through the end of calendar 2022. The additional consideration is limited to a maximum of $140 million. The transaction is expected to close by the end of the calendar 2017 or soon thereafter, subject to regulatory approvals and other customary closing conditions. The acquisition is expected to be neutral to EA’s net income in fiscal years 2018 and 2019.