Electronic Arts has announced an agreement with Elevation Partners to acquire VG Holding Corp., the owner of both BioWare Corp. and Pandemic Studios.
"These are two of the most respected studios in the industry and I'm glad to be working with them again," said EA CEO John Riccitiello.
"They'll make a strong contribution to our strategic growth initiatives on quality, online gaming and developing new intellectual properties. We also expect this will drive long-term value for our shareholders."
Riccitiello formed Elevation Partners in 2004, shortly after leaving EA. In 2005, his new company made a bid for Eidos, which it later withdrew.
Riccitiello returned to Electronic Arts as its CEO in early 2007.
EA will pay up to USD 620 million in cash to the stockholders of VG Holding Corp. and will issue up to an additional USD 155 million in equity to certain employees of VG Holding Corp., subject to time-based or performance-based vesting criteria.
EA will also assume outstanding VG Holding Corp. stock options and has agreed to lend VG Holding Corp. up to USD 35 million through the closing of the acquisition.
The Pandemic and BioWare teams will join the EA Games label currently run by Frank Gibeau.
BioWare is currently developing Mass Effect, which will be published by Microsoft for the Xbox 360 in November, and is in the early development stages of a massively multiplayer online game. Pandemic Studios is developing the upcoming Mercenaries 2: World in Flames and Saboteur.
The two developers employ roughly 800 people across four studios located in Edmonton, Canada; Los Angeles; Austin, Texas; and Brisbane, Australia.