Atari buying Nightdive Studios

Led by business veterans Stephen Kick and Larry Kuperman, Nightdive is a full service improvement and publishing firm with experience in restoring, optimizing, and publishing basic video video games. Nightdive has printed over 100 titles and has garnered vital acclaim for his or her releases of seminal business and fan-favorite titles together with System Shock, DOOM 64, and Quake.

Nightdive’s most up-to-date mission is a remastered model of basic first-person shooter recreation System Shock, which is without doubt one of the most-anticipated retro releases of 2023. System Shock is now accessible for pre-order on Steam, GOG and Epic Games.

A key to the success of Nightdive is their proprietary KEX engine that makes basic video games playable on fashionable {hardware} and offers the studio the power to reinforce and enhance upon the unique to satisfy the expectations of latest gamers. The studio’s status and deep business information have made them a go-to associate for a number of the largest names in gaming and media and allowed them to develop a diversified portfolio of titles.

For the fiscal yr ended December 2022, Nightdive has reported income of roughly US$3.0 million1. The founders personal 87% of the Company’s shares whereas Wade Rosen, Chairman and CEO of Atari, owns a minority stake of 13%.

With this acquisition Atari will enrich its giant library of owned IP, be capable to leverage Nightdive’s proprietary know-how, and make the most of Nightdive’s publishing capabilities to assist Atari’s retro-focused progress technique.

This acquisition has been authorized unanimously by the disinterested members of the board of Atari, it being specified that Wade Rosen didn’t take part to the vote.

Wade Rosen, Chairman and CEO of Atari, commented: “Nightdive’s confirmed experience and profitable observe report in commercializing retro IP is well-aligned with Atari’s technique and I’m assured that their mixed expertise, know-how and IP portfolio will contribute to Atari’s future success.”

Stephen Kick and Larry Kuperman, principals of Nightdive commented: “Nightdive and Atari have an extended historical past collectively and we all know that Atari shares our ardour for retro video games and our concentrate on producing high-quality new and remastered video games that do justice to the unique IP. As we glance to develop our enterprise and develop our capabilities, we may consider no higher long-term associate than Atari.”

Terms and Timing of the Acquisition

The buy value of Nightdive will include (i) an preliminary consideration of US$10 million payable half in money and half in Atari shares on the closing of the acquisition (see beneath) plus (ii) an earn-out of as much as US$10 million, payable in money over the subsequent three years based mostly on the long run efficiency of Nightdive.

It is anticipated that the acquisition of Nightdive will likely be accomplished in April 2023.

Financing of the Acquisition

• The preliminary consideration will likely be paid half in money (for US$5 million) and half in newly issued Atari bizarre shares (for US$5 million). The calculation of the variety of Atari shares to be issued will likely be based mostly on the 20-day quantity weighted common value of Atari shares on Euronext Growth previous to the tenth day previous to the closing of the transaction.
• The new Atari shares will likely be issued by the Company, represented by the board of administrators of Atari, via a contribution in form (apport en nature) of Nightdive shares to Atari performing pursuant to the 18th decision of Atari’s mixed shareholders’ assembly held on September 27, 2022 (the “AGM”) and on the premise of the experiences of a court-appointed contribution auditor (commissaire aux apports) on the worth of the contribution in form and the equity of the alternate ratio5.
• The Company and Irata LLC, a holding firm managed by Wade Rosen (“Irata”), have agreed that Irata intends to offer bridge financing to Atari for the fee of the preliminary consideration, or $5 million.

Convertible Bonds

The Company intends to problem €30 million in Convertible Bonds via a public providing in France with a precedence subscription interval (offre au public avec délai de priorite) for all of the shareholders of Atari.

• A prospectus in relation to the Convertible Bonds providing will likely be ready and topic to the AMF approval;
• The issuance of the Convertible Bonds will happen shortly after the completion of the acquisition;
• The Convertible Bonds will likely be issued with a precedence subscription interval for all shareholders for a interval of three buying and selling days (that doesn’t consequence within the creation of negotiable rights) via a public providing in France (solely);
• The most important shareholder of Atari, Irata LLC, holding 29.2% of the share capital of Atari, has indicated that it intends to subscribe its prorata share and to offer a agency underwriting for quite a lot of Convertible Bonds equal to at the very least to 75% of the whole quantity of the providing;
• It is the intent that Irata will undertake contractually and irrevocably vis-à-vis the Company to not convert its Convertible Bonds into Atari shares earlier than at the very least the twenty fifth of June 2025.

The quantity raised via the Convertible Bonds will primarily be used to:

• Reimburse the $5 million bridge financing offered by Irata within the context of the acquisition and finance future potential acquisitions Atari could think about;
• Continued funding in progress initiatives, notably within the improvement of greater than 12 new video games anticipated to be launched within the subsequent 18 months;
• General money necessities and monetary flexibility essential to pursue the transformation plan;
• Reimburse the shareholder loans granted by Irata6 beforehand granted in accordance with its assist dedication, and accrued pursuits on these loans.