Providence Equity's Sale of ZeniMax Will Bring Lucrative End to 13-Year Deal
September 21 2020 - 6:35PM
Dow Jones News
By Laura Kreutzer
Private-equity firm Providence Equity Partners stands to win big
on the sale of its stake in videogame producer and Bethesda
Softworks parent ZeniMax Media Inc.
Microsoft Corp. has agreed to acquire the Rockville, Md.-based
company for $7.5 billion in cash. The deal promises to return more
than six times Providence Equity's investment in the company, which
dates back to 2007, according to a person with knowledge of the
deal.
When Providence made its first investment in ZeniMax in 2007,
the game maker had a single studio and around 200 employees.
Providence's roughly $300 million investment gave the firm a 25%
stake in the company and valued it at around $1.2 billion, Dow
Jones Newswires reported at the time. ZeniMax's most popular
product then was the single-player fantasy game "Elder Scrolls IV:
Oblivion."
The private-equity firm funded its initial investment out of its
sixth flagship buyout fund, Providence Equity Partners VI LP, which
closed with around $12 billion in 2007.
In the years that followed, ZeniMax steadily picked up other
videogame studios. It acquired id Software in 2009, maker of
videogames "Wolfenstein," "Doom" and "Quake," and Arkane Studio,
producer of "Arx Fatalis" and "Dark Messiah of Might and Magic," in
2010. That same year, Providence invested another $150 million in
the company.
ZeniMax now has grown to some 2,300 employees in 15 offices
around the world, including eight development studios, the person
said.
Founded in 1989, Providence Equity focuses its investments in
areas such as media, telecommunications, education, and the
software and services industries. It managed more than $22 billion
in client assets as of Dec. 31, 2019, according to the firm's
latest registered investment adviser filing.
Write to Laura Kreutzer at laura.kreutzer@wsj.com
(END) Dow Jones Newswires
September 21, 2020 18:20 ET (22:20 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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