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Goldman Sachs is set to earn a $110mn fee for advising Electronic Arts on its record $55bn take-private deal, making it the most lucrative M&A transaction in the Wall Street investment bank’s history.
A consortium of Saudi Arabia’s Public Investment Fund, private equity group Silver Lake and Jared Kushner’s investment firm Affinity Partners agreed to acquire the video game maker in September.
Goldman served as EA’s sole adviser on what ranks as the biggest leveraged buyout of all time.
The fee comes amid a deluge of large deals across corporate America — fuelled by steady debt markets, lighter competition oversight and chief executives’ confidence over the strength of the US economy — which have led to huge payouts to advisers.
Bank of America is poised to earn a $130mn fee from its role advising railway giant Union Pacific’s $85bn takeover of rival Norfolk Southern earlier this year, eclipsing the $123mn fee JPMorgan Chase generated from advising on drugmaker AbbVie’s $63bn acquisition of Allergan in 2020.
According to a securities filing on Monday, Goldman was paid $10mn when the EA deal was announced, with the remaining $100mn due when the transaction closes, which requires shareholder and regulatory approval.
EA had not paid Goldman any advisory or underwriting fees in the previous two years, the filing disclosed. However, Goldman had earned $24mn and $154mn for work with PIF and Silver Lake, respectively, in the previous 24 months.
Goldman separately had a $1.3bn stake in PIF and a $200mn stake in Silver Lake funds as of September.
The filing shows Silver Lake first approached EA’s chief executive in early March about a possible transaction. The Saudi sovereign wealth fund, which already owned a tenth of EA, and Affinity joined the bidding group shortly thereafter.
The group made its initial offer for EA in early September for $200 per share, ultimately striking a deal at $210 a share at the end of the month — a 25 per cent premium over its share price at the time.
Kushner’s investment firm would end up owning about 5 per cent of EA, while PIF would become a majority owner and Silver Lake a large minority owner following the deal, the Financial Times previously reported. The deal is set to close in the first half of next year.
Goldman’s largest publicly disclosed fee to date came from the 2024 sale of Pop Tarts-maker Kellanova to Mars for $36bn, for which the investment bank earned $93mn.
JPMorgan is leading a $20bn financing for the EA deal, which is expected to net hundreds of millions of dollars in separate fees for a large consortium of banks.
Goldman Sachs declined to comment.
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