Electronic Arts is all set to advance their position in the growing mobile video gaming market. To do this, they have resorted to the acquisition route. The company has formally announced acquiring mobile game provider Jamdat Mobile in a deal for which it will have to shell out a sum in the range of $680 million, the transaction will be finalized before the end of the fourth quarter, i.e., 31st March, 2006.
The deal will enhance the video gaming portfolio of Electronic Arts as some of the popular mobile games of Jamdat like Tetris, Bejeweled, and Jamdat Bowling will be added to its list of offerings after the acquisition. For this significant acquisition, Electronics Arts has agreed to pay a premium of nearly 20 per cent on a per share basis. The company will be paying $27 in cash for each share of Jamdat stock which is presently quoting in the range of $22-23 at the NASDAQ Stock Exchange.
Commenting on the deal, Electronic Arts Chairman Larry Probst said that it reflects their ambition to grow fast in the mobile gaming segment, “We joined with the leader in North America to enable our content to be deployed on mobile phones more aggressively here and globally.” The companies grow fast strategy through acquisition hardly seems to be unfounded given the fact that according to a recent projection, the mobile gaming segment will witness a high growth trajectory in the immediate future from the present levels of nearly $1 billion globally.
After the announcement of the deal on Thursday, shares of Electronic Arts, however, tumbled marginally at NASDAQ whereas Jamdat shares witnessed a jump of $1.57 or 6.9 per cent in the extended trading.