Video game publishing titan Electronic Arts Inc. (EA) announced in a press release on the afternoon of July 12 that it was acquiring PopCap Games, “a leading provider of games for mobile phones, tablets, PCs and social network sites” for $650 million in cash and $100 million in EA stock to be issued to “certain” members of PopCap.
Previous rumors had circulated that the deal was for $1 billion after being reported by technology internet publication TechCrunch. That initial estimate proved high. EA does plan, however, to pay an additional $550 million to PopCap if the company were to generate cumulative before-tax-and-interest earnings more than approximately $343 million over the next two years.
At lower earnings levels, EA will still pay additional, but smaller, sums.
“PopCap sellers are entitled to additional variable cash consideration, contingent upon the achievement of certain non-GAAP earnings before interest and tax (“EBIT”) performance milestones through December 2013,” reads the statement.
EA also plans on paying $50 million in “long-term equity retention awards to PopCap employees” over four years.
PopCap is known for its model of producing numerous and popular casual games across almost every platform, including web, PC, game consoles, cell phones, tablets, and other mobile devices.
“PopCap is the leading global developer, publisher and operator of casual video games: fun, easy-to-learn, captivating games that appeal to all ages,” reads the statement.
PopCap’s most popular franchise, Bejeweled, has sold over 50 million units.