Atari announced today that it has entered into an agreement to acquire night dive studios.

Atari said the move will allow the company to add to its extensive library of exclusive franchises, leverage Nightdive’s proprietary technology, and use the studio’s publishing capabilities to support the company’s retro-centric growth strategy. Atari.

Nightdive Studios executives Stephen Kick and Larry Kuperman said of the news, “Nightdive and Atari have a long history together and we know Atari shares our passion for retro gaming and our focus on game production. new and remastered in high quality. justice to the original intellectual property. As we seek to grow our business and expand our capabilities, we couldn’t think of a better long-term partner than Atari.”

Led by industry veterans Stephen Kick and Larry Kuperman, Nightdive is a full-service development and publishing company with expertise in restoring, optimizing and publishing classic video games. Nightdive has released over 100 titles and garnered critical acclaim for its releases in industry critical and fan-favorite titles including System Shock, DOOM 64, and Quake.

Nightdive’s newest project is a remastered version of the classic first-person shooter System Shock, which is one of the most anticipated retro releases of 2023. System Shock is now available for pre-order on Steam, GOG, and Epic Games.

One of the keys to Nightdive’s success is its proprietary KEX engine which makes classic games playable on modern hardware and gives the studio the ability to improve and improve upon the original to meet the expectations of contemporary gamers. The studio’s reputation and deep industry knowledge have made it a go-to partner for some of the biggest names in gaming and media and allowed them to develop a diverse portfolio of titles.

For the fiscal year ending December 2022, Nightdive recorded revenue of approximately US$3.0 million1. The founders own 87% of the company’s shares, while Wade Rosen, chairman and CEO of Atari, has a minority stake of 13%.

With this acquisition, Atari will add to its vast library of intellectual property, be able to leverage Nightdive’s proprietary technology, and utilize Nightdive’s publishing capabilities to support Atari’s retro-focused growth strategy.

This acquisition was unanimously approved by the disinterested members of the board of directors of Atari, specifying that Wade Rosen did not participate in the vote.

Wade Rosen, President and CEO of Atari, said, “Nightdive’s proven track record and success in commercializing retro IP aligns well with Atari’s strategy and I am confident that their portfolio combination of talent, technology and intellectual property will contribute to future success. from Atari. ”

Stephen Kick and Larry Kuperman, Directors of Nightdive, commented: “Nightdive and Atari have a long history together and we know that Atari shares our passion for retro gaming and our goal of producing high quality new and remastered games that make justice to the IP. .of origin. . As we seek to grow our business and expand our capabilities, we couldn’t think of a better long-term partner than Atari.”

Vesting conditions and schedule

The purchase price for Nightdive will consist of (i) an initial consideration of US$10 million payable half in cash and half in Atari shares upon closing of the acquisition (see below) plus (ii) a payout of up to US$10 million, payable in cash over the next three years based on future Nightdive performance.

The acquisition of Nightdive is expected to close in April 2023.

Acquisition financing

  • The initial consideration will be paid half in cash ($5 million) and half in newly issued Atari common stock ($5 million). The calculation of the number of Atari shares to be issued will be based on the volume-weighted average price over 20 days of the Atari share on Euronext Growth before the tenth day preceding the closing of the operation.
  • The new Atari shares will be issued by the Company, represented by the board of directors of Atari, by way of contribution in kind of Nightdive shares to Atari acting pursuant to resolution number 18 of the Combined General Meeting of shareholders dated September 27, 2022 (the “AGM”) and based on the reports of a court-appointed contribution auditor on the value of the contribution in kind and the fairness of the exchange rate5.
  • The Company and Irata LLC, a holding company controlled by Wade Rosen (“Irata”), have agreed that Irata intends to provide bridge financing to Atari for the payment of the initial consideration, being $5 million.

Convertible links

The Company intends to issue €30 million of Convertible Bonds through a public offering in France with a priority subscription period (public offering with priority period) to all Atari shareholders .

  • A prospectus will be prepared in connection with the offer of the Convertible Bonds and will be subject to AMF approval;
  • The Convertible Bonds will be issued shortly after completion of the acquisition;
  • The Convertible Bonds will be issued with a priority subscription period to all shareholders during a period of three trading days (which does not give rise to the creation of negotiable rights) by public offer in France (only);
  • Atari’s principal shareholder, Irata LLC, which holds 29.2% of Atari’s capital, has indicated its intention to subscribe to its share on a pro rata basis and to propose a firm subscription for an amount of Convertible Bonds equal to at least 75% of the total amount of the offering;
  • It is Irata’s intention to undertake contractually and irrevocably towards the Company not to convert its Convertible Bonds into Atari shares before June 25, 2025 at the latest.

The amount raised through the Convertible Bonds will mainly be used for:

  • Repay the $5 million bridge loan provided by Irata in connection with the acquisition and fund potential future acquisitions that Atari may consider;
  • Continued investment in growth initiatives, particularly in the development of over 12 new games expected to be released over the next 18 months;
  • General cash requirements and financial flexibility necessary to carry out the transformation plan;
  • To repay the shareholder loans granted by Irata6 previously granted in accordance with its support commitment, and the interest accrued on the said loans.

Nightdive Studios has already helped bring several classic games to Switch. These include Quake, Doom 64, Turok titles, and more.

Categorized in: