Daiwa New issue Color
$550m (+82.5m) 144a sen cb pricing tonight from MS/JPM/UBS. Terms: 5 yr bullet, 1-1.5% up 30-35% prots, UOP = PopCap acq, warrant trans & gcp. EA is a leading video gamer (think Madden NFL). They just announced acq of PopCap (plants vs zombies) for $650m cash +100m stk +w/up to $550 m future payments. But other recent acq have not gone as well as esp. w/$2B cash and no other debt, solid credit. We’ll usse L+325 (see credit color) Jan 13 $30 options are 34 bid. We will use 30v. Theo = 101.125. Decent sized deal, clean structure, balanced (85fl/60d). Model prefers mids but we know this is not model driven. Get in the game.
BUY
Credit color
Publisher of interactive software games, incl the sims, madden, fifa soccer
PF Cash $1046m
PF Debt = $550m
LTM EBITDA $12m
LTM FCF $260m
Leverage 46x
Mkt cap = $8B
Significant player in electronic s/w Key rev drivers in FY 11 madden NFL II. FIFA II & need for speed hot puisuit. Focused on growing digital presence, saw rev grow from $522m FY10 to $743m FY11 & guiding for >$1B FY12. Pop cap acq will bolster digital. Paying $650m cash plus $100m stock w/up to $550m cont payments. Recent acq have not gone as well as expected. Announced stock buyback prog earlier this yr. $149m done ytd
L+325