Back in November, it seemed as if the UK-based software company Codemasters would be taken over by Take-Two Interactive Software. An agreement, believed to be worth around $980 million had been struck by the boards of the two companies and the takeover was expected to pass through in Q1 of 2021.
However, that deal was sensationally shelved this past week when it emerged that Electronic Arts (EA) had effectively gazumped the previous deal, by agreeing a greater value takeover with the company responsible for the popular F1 Esports series of games.
Preliminary Acquisition Terms
The deal with Take Two had only ever been on Preliminary Acquisition Terms and had not yet been fully ratified and it seems that EA has taken full advantage of this to offer Codemasters shareholders a valuation of $1.2 billion for their company.
This fresh offer is approximately $220 million more than the first offer from Take-Two. It means that a shareholder will be entitled to around £6.04p ($8.08) in cash for each share of the company that they currently hold.
This is a key move for EA Sports, who have become a name synonymous with sporting-based esports titles. The company already holds the rights to games such as FIFA 21, Madden, and NBA2k. Purchasing the company that is responsible for the official F1 video game will only broaden its scope in this very popular, and profitable field.
The benefits will come in two ways. Firstly, in terms of the number of units sold per annum of the game, as well as the chance to expand the potential of the title within the competitive esports gaming environment, where the game is already used as the driving force behind the F1 Esports Series, which has been running each year since 2017.
In truth, it is something of a reacquisition of the F1 title for EA Sports. The company had held the rights to the game around 20 years ago, but Codemasters had been the company responsible for the most recent F1 official games.
“Exciting and Prosperous Future”
Speaking about the 11th hour bid being accepted, the chairman of Codemasters Gerhard Florin commented:
“Electronic Arts and Codemasters have a shared ambition to lead the video game racing category.”
“The board of Codemasters firmly believes the company would benefit from EA’s knowledge, resources and extensive global scale – both overall and specifically within the racing sector.”
“We feel this union would provide an exciting and prosperous future for Codemasters, allowing our teams to create, launch and service bigger and better games to an extremely passionate audience.”
Driving Games Focus
Although founded back in the days of 8-bit gaming when their output of budget games was considerably more varied, Codemasters had recently become focused ostensibly on driving games. As well as their annual official F1 title, they released new games in the DiRT and Grid series of games and completed the takeover of Slightly Mad Studios earlier this year.
Slightly Mad Studios had developed the Project CARS game, as well as two Need for Speed games, both of which were published by EA around ten years ago.
In a press release about the acquisition, EA Sports commented that:
“Bringing together the combined expertise and talent from Codemasters’ critically-acclaimed sports and racing franchises Formula 1, DiRT, DiRT Rally, Grid and Project Cars, with EA’s global Need for Speed franchise, fan-favourite Real Racing mobile game and EA Sports brands will enable our teams to innovate further, and meaningfully increase the delivery of content and experiences to a growing, global audience for racing entertainment.”