Business Case Studies & Business Publications

The Ultimate Battle: Taking Electronic A...

Loutskina, Elena;H...

Case

The Ultimate Battle: Taking Electronic Arts Private

Loutskina, Elena; House, Martha

F-2159 | Published August 11, 2026 | 20 Pages Case

Collection: Darden School of Business

Product Details

In April 2026, Sarah Chen, a vice president on Silver Lake's deal team, revisits the firm's proposed $55 billion leveraged buyout of Electronic Arts (EA). The transaction—backed by Saudi Arabia’s Public Investment Fund (PIF) and Jared Kushner's Affinity Partners—remains under regulatory review, while higher interest rates, lender concerns about projected EBITDA, and uncertainty surrounding artificial intelligence complicate the original investment thesis. Chen must advise Silver Lake’s investment committee whether to proceed with the deal, retain its approximately 6× debt structure or add expensive subordinated financing, and determine how much downside EA can absorb before the equity returns become unacceptable. The case can be used to introduce LBO and related cash-flow modeling, or to conduct a more sophisticated scenario analysis of how additional leverage, interest-rate exposure, exit multiples, and the effects of strategic and regulatory uncertainty affect sponsor returns in a highly leveraged, hit-driven, technology-enabled entertainment business.