How Does Silver Lake Exit That $55 Billion EA Leveraged Buyout?
Silver Lake needs an exist strategy to profit from its participation in the $55 billion leveraged buyout of Electronic Arts.
Photographer: Jon Cherry/BloombergThe key to a successful private equity transaction is to plan the end at the beginning. That applies even when its inception is as impressive as the record-breaking $55 billion deal for video game developer Electronic Arts Inc.
While the numbers are large and a consortium is required to pull this together, the transaction doesn’t mark the return of the “club deal” where a herd of identikit buyout shops underpin a mammoth leveraged buyout in a burst of irrational exuberance. Individual buyout firms can stretch for big assets nowadays with finance from the private credit boom. Rather, the buyer group is an unusual mix: Saudi Arabia’s sovereign wealth arm, the Public Investment Fund; US buyout firm Silver Lake Management, best known for taking computer maker Dell private; and Affinity Partners, the private equity firm founded by President Donald Trump’s son-in-law Jared Kushner.