A New Game Plan: Taking EA Private

After a subdued period for mega leveraged buyouts, the M&A landscape has been shaken by the announcement of the largest take-private transaction in history. Electronic Arts, the California-based video games maker behind franchises such as EA Sports FC, Madden NFL and The Sims, has agreed to be acquired by a consortium led by Silver Lake, the Public Investment Fund (PIF) and Affinity Partners in an all-cash deal valued at $55 billion.

The agreement values EA shares at $210 each, a 25% premium to pre-rumor trading levels and surpasses the 2007 TXU deal to become the biggest LBO on record. Financing comprises $36 billion in equity, including PIF’s rollover of its 9.9% stake, alongside $20 billion of debt led by JPMorgan. EA’s longtime CEO Andrew Wilson will remain in place to lead the company through its transition to private ownership, with completion expected in 2027.

Leveraged buyouts of this size have been out of favor for more than a decade, after the highly indebted mega-deals of the mid-2000s left investors disappointed. EA’s cash-generative business and extensive gaming portfolio make it a different type of bet, but the math is still demanding: the $55 billion price tag implies an EV/EBITDA multiple of around 20x, well above the long-term average. Investors are wagering that artificial intelligence can cut billions from EA’s cost base and provide the operating leverage to justify such an ambitious valuation.

The following analysis explores where this landmark deal fits in the broader buyout universe from all-time LBO rankings and the role of the most active funds, to dry powder levels and private equity’s performance relative to public markets.

The $55 billion take-private of Electronic Arts enters the all-time LBO rankings at fifth place by nominal value, but when previous mega-deals are restated in today’s dollars, it becomes clear how extraordinary the buyout boom of the mid-2000s truly was. RJR Nabisco remains the largest leveraged buyout in history on an inflation-adjusted basis at $87.5 billion, followed by TXU and Equity Office Properties both struck during the 2006–07 credit bubble. EA stands out as the only post-2010 transaction to break into the top five, highlighting the return of large-scale financial engineering after more than a decade of restrained dealmaking. Unlike the heavily cyclical or capital-intensive targets of past eras, EA represents a cash-rich, IP-driven technology asset, marking a structural shift in the types of businesses attracting mega-LBO capital.

The latest Horizon IRR data shows that growth equity has edged out buyouts over the past 12 months, reflecting the rebound in tech valuations and liquidity conditions. But over 3-, 5- and 10-year periods, buyouts remain the strongest-performing private capital strategy, consistently delivering the highest returns.

In contrast, venture capital trails significantly over longer horizons, weighed down by the post-2021 valuation reset and limited exit activity. Fund of funds and growth equity strategies cluster in the middle, offering smoother but less compelling return profiles. The data underscores why institutional capital continues to prioritize buyout allocations as a core return engine, even as excitement builds around AI-driven growth opportunities.

The top 10 buyout funds of all time are overwhelmingly recent vintages, signaling how capital has consolidated around a small group of established sponsors. CVC is the lone European firm to break into the top tier, while North American giants like Blackstone, Apollo, Advent, Hellman & Friedman and Thomas Bravo dominate fund sizes above $24 billion.

This concentration reflects a clear LP preference: in an uncertain macro environment, institutions are allocating disproportionately to managers with long track records, scale, and perceived execution certainty. As a result, mega-funds are now large enough to single-handedly finance deals like EA’s $55 billion take-private — a level of firepower that was unheard of during the 2006–07 LBO wave.

The flip side is a growing barbell effect in the fundraising market: emerging and mid-sized managers face increasingly challenging closes, as capital flows gravitate toward the top decile of sponsors. With LP slots oversubscribed and re-ups prioritized, new entrants are being squeezed out of the mega-deal opportunity set entirely.

With a transaction value of $55.2 billion, the EA take-private instantly becomes the largest corporate buyout ever attempted surpassing even the TXU transaction, which stood as the high-water mark of the pre-GFC leverage boom. What’s notable is not just the scale, but the profile of the asset being targeted: unlike legacy infrastructure or utility plays such as TXU or Alltel, EA represents a high-margin, IP-rich digital platform with global recurring revenues.

The table also highlights the growing role of sovereign capital and crossover tech specialists. Silver Lake and PIF’s lead roles in EA mark a clear departure from the traditional Wall Street-led LBO syndicates seen in historic deals by KKR, TPG and Goldman Sachs. This signals a new competitive dynamic, where long-duration sovereign wealth capital and tech-native private equity sponsors are willing to outbid traditional buyout players for strategic digital assets.

Meanwhile, the bulk of completed mega take-privates remain clustered between 2006–2007, underscoring how rare it has been for deals of this size to clear in today’s regulatory and financing environment. EA could therefore serve as a reference point for a new wave of tech-focused take-private activity provided the return math holds under higher-rate conditions.

Global buyout dry powder has climbed steadily for over two decades, reaching a record $1.08 trillion in available capital. What began as a niche asset class with limited firepower in the early 2000s has evolved into a liquidity-rich industry capable of financing multiple EA-sized take-privates simultaneously.

The steady accumulation of unspent capital reflects two powerful structural trends:

• LPs’ persistent demand for private equity exposure, even through macro downturns.
• A slower deployment pace, as sponsors wait for more attractive entry points and improved financing conditions.

With over a trillion dollars sitting on the sidelines, the pressure to deploy is intensifying especially among mega-funds, which must execute ever-larger transactions to move the needle on performance. This dry powder overhang is a key backdrop to the EA deal: sponsors are increasingly compelled to pursue bold, high-conviction bets, particularly in scalable tech assets where AI-driven operating leverage can justify premium valuations.

The Private Capital Index shows that buyout funds have consistently outperformed major public benchmarks like the S&P 500 and MSCI World since the Global Financial Crisis, with the gap widening materially in 2022 and 2023, when listed equity markets struggled with rate shocks and valuation resets. In contrast, private equity managers were able to support portfolio companies through active ownership and strategic add-on acquisitions, preserving value while public indices suffered from sentiment-driven drawdowns.

However, it’s important to note that comparing private market returns to public equity indices has limitations. Public indices like the S&P 500 are increasingly top-heavy and concentrated in a handful of mega-cap tech names, while private equity performance reflects smoothed valuations and active capital deployment strategies. Even so, the persistence of outperformance across cycles explains why institutional allocators continue to increase their buyout exposure despite slower distributions and higher entry multiples.

The largest investors in private equity buyout funds are dominated by sovereign wealth funds, public pensions and global asset managers, with CPP Investments, ADIA, Mubadala and CalPERS leading commitments by scale. These institutions represent the core liquidity base behind today’s mega-funds, with individual allocations that exceed the total fund size of many mid-market managers.

The data highlights two structural shifts shaping the buyout landscape:

• Sovereign wealth funds and Canadian pensions now behave like strategic partners, not passive LPs, often co-underwriting large deals or rolling equity stakes as seen with PIF’s role in the EA transaction.
• Capital is increasingly concentrated in a handful of global anchor allocators, who have both the mandate and scale to influence fund strategy, pacing and even deal selection.

This concentration of LP commitments mirrors the consolidation happening among GPs: a small group of mega-allocators are effectively powering the largest buyout vehicles, creating a closed loop where top-decile managers and top-decile LPs dominate the flow of capital and opportunity. For newer or niche funds, cracking this LP circle has become one of the biggest barriers to scaling.