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Between $20 to $100 million speculated on Firemint acquisition price

Submitted by Anonymous (not verified) on Thu, 05/05/11 - 8:12 PM Permalink

at least 150k a head a year?

Investors in the tech industry have NFI.

Submitted by Anonymous (not verified) on Fri, 06/05/11 - 2:52 PM Permalink

It does cost quite a bit on top of an employees salary to employ someone. You need to take into account everything else such as hardware, software licenses, dev kits, rent, power bills etc..

Submitted by souri on Thu, 05/05/11 - 11:15 PM Permalink

"One of the things we rather enjoy here is acquiring companies and then having people speculate that we spent five times more on it than we actually did," said Riccitiello, referring to both initial reports of its acquisition of Angry Birds publisher Chillingo last year and its just-announced Firemint (Flight Control) acquisition, saying that the purchase price was "vastly lower" than the one reported by some outlets.

According to Brown, the acquisition cost EA "less than $25 million."

Submitted by Anonymous (not verified) on Fri, 06/05/11 - 2:06 PM Permalink

To the surprise of nobody...

Firemint and Infinite Interactive are successful, but not THAT succesful. And given the size of either company, anything more than $25 million was pure fantasy. Makes a good headline, though.

Lesson here - Tech industry investors > Venture capital firms.

Although Electronic Arts did not disclose how much they paid to acquire prominent Melbourne based games development studio, Firemint, during their announcement yesterday, it hasn't stopped tech industry investors and analysts from estimating how much the deal was worth.

The Sydney Morning Herald has an article containing the speculations of various tech industry sources on how much EA paid for Firemint, basing their estimations on the employee size of Firemint to how much the studio was turning over annually.

Investors in the tech industry field put the sale of Firemint between $20 and $40 million, based on the knowledge that the studio had a turn over $10 million dollars in revenue per year. Another source with connections to major venture capital firms puts that ceiling much, much higher, from $25 to $100 million. From

"They've got 60 people so they'd be costing at least $150,000 a head for sure. If there's 60 of them, that probably means they're spending $9 million a year at least in costs; if you assume that they're making at least $9 million a year in revenue, even just on a revenue multiple of four or five times you imagine it's somewhere between $25 and $100 million, depending on how crazy Electronic Arts were for it," the source said...

Even if you're making $5 million a year in revenue you're going to get $25 million.

** Update:

During a conference call, EA executives revealed that the publisher paid less than $25 million to acquire Firemint.