Electronic Arts, Inc., the world's largest video games publisher, has announced that it will acquire video game studios, BioWare Corporation and Pandemic Studios, both privately held companies that have been partners with EA under a deal with VG Holding Group with backing from private equity firm, Elevation Partners. Elevation's investment team also includes U2 group singer, Bono, and Fred Anderson, a former Chief Financial Officer of Apple, Inc.

BioWare is the creator of critically acclaimed role-playing games, such as “Star Wars: Knights of the Old Republic" and its eagerly awaited sci fi game, "Mass Effect," is being published next month by Microsoft Corporation.  Pandemic is the creator of military themed action and first person shooter games such as “Star Wars Battlefront” and “Full Spectrum Warrior” and has in development a new game for THQ known "Destroy All Humans 2."  Both of these video game studios will add a niche to EA that was not there previously.

EA issued a statement that it has plans to release four or five games per year from these studios in the upcoming fiscal years for 2009-2011.  EA reportedly will pay $655 million in cash and $150 million in equity incentives that are tied to performance, for a total of $855 million; EA will also assume $50 million in stock options issued by VG Holdings.  EA has reported that it the addition of these two game creation studios could also boost EA's revenue by more than $300 million in 2009-2010.

Pandemic and BioWare employ nearly 800 employees in four studio locations in Edmonton, Alberta, Canada; Los Angeles, California; Austin, Texas; and Brisbane, Australia.

The deal is expected to close in January 2008.

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