Atari agrees to buy classic game maker Digital Eclipse for up to $20M

Atari has agreed to buy classic video game maker Digital Eclipse for as much as $20 million in money and inventory.

The deal consists of $6.5 million up entrance in money and inventory in addition to a possible bonus of $13.5 million over 10 years.

Atari is already the proprietor of among the world’s most iconic shopper manufacturers and interactive leisure equivalent to Pong and Breakout. And now it’s selecting up Digital Eclipse Leisure Companions Co. (“Digital Eclipse”), a sport growth studio initially based in 1992.

Emeryville, California-based Digital Eclipse is concentrated on the digital restoration of basic video video games.

The acquisition of Digital Eclipse will enable Atari to develop its inner growth capabilities and make the most of Digital Eclipse’s industry-leading expertise and proprietary know-how. In becoming a member of Atari, Digital Eclipse will develop its enterprise and capabilities by increasing its growth capability and entry to world-class mental property and can leverage Atari’s administration experience.

By including Digital Eclipse, together with Nightdive Studios in Could 2023, Atari will have the ability to additional assist its retro-focused development technique.

Digital Eclipse is devoted to preserving gaming’s heritage and telling the tales of gaming historical past by way of archival releases and interactive documentaries. Digital Eclipse pioneered industrial online game emulation effectively earlier than it was a family idea and at the moment Digital Eclipse is one in every of a choose few growth studios acknowledged as leaders in retro-focused growth.

Digital Eclipse video games embrace Avenue Fighter: thirtieth Anniversary, Mega Man Legacy Assortment, SNK fortieth Anniversary Assortment, Teenage Mutant Ninja Turtles: The Cowabunga Assortment and Disney Traditional Video games Assortment, which all offered tens of millions of models and have been critically acclaimed. Extra not too long ago, Digital Eclipse developed the Atari 50: The Anniversary Assortment which has been labeled because the “new gold commonplace” for video games compilations and was one of many highest rated titles of 2022.

Digital Eclipse’s most up-to-date initiatives embrace the launch of The Making of Karateka and Wizardry: Proving Grounds of the Mad Overlord in Early Entry on Steam.

Since inception, Digital Eclipse has produced over 250 video games and developed long-standing relationships with main publishing and growth companions within the {industry} to ship superb video video games and collections. With its modern proprietary know-how, Digital Eclipse is now main this class in gross sales, important reception and innovation.

Wade Rosen, chairman and CEO of Atari, stated in a press release, “Digital Eclipse is the most effective on this planet at what they do. They’ve a deep love and respect for the historical past of the video games {industry}, and are famend for growing critically acclaimed initiatives primarily based on historic franchises. Digital Eclipse, together with Nightdive, are in good alignment with Atari’s DNA and renewed function. I’m personally excited to see the place we will push the boundaries of retro innovation collectively.”

Andrew Ayre, CEO of Digital Eclipse, stated in a press release, “Atari and Digital Eclipse share the identical ethos with regards to celebration and preservation of gaming historical past. It’s an thrilling mixture, and I’m assured it will serve Digital Eclipse and our followers extraordinarily effectively as we develop our enterprise and develop our capabilities.”

Mike Mika, president and inventive director added, “Our expertise collaborating on Atari 50: The Anniversary Celebration was revelatory. The belief that Atari confirmed our staff, and our clear mutual love and respect for the content material, positioned us to provide one thing really exceptional. I do know Atari will proceed to champion our strategy and that we are going to be bringing followers thrilling new initiatives for years to return.”

Monetary phrases

The acquisition value of Digital Eclipse will include an preliminary consideration of $6.5 million payable on the closing of the acquisition, of which $4 million can be in money $2.5 million in newly issued Atari atypical shares, in addition to a remaining earn-out of as much as $13.5 million, payable in money over the following ten years primarily based on future efficiency of Digital Eclipse.

It’s anticipated that the acquisition of Digital Eclipse can be accomplished within the coming days.

Along with the money consideration, Atari may also purchase a portion of the shares in Digital Eclipse straight and the acquisition value of such shares akin to $2.5 million can be paid by the use of set-off towards the issuance of newly issued Atari SA shares.

The reserved capital enhance will outcome within the issuance of 20,165,794 new Atari shares. Consequently, Digital Eclipse shareholders will collectively maintain upon completion of the capital enhance 4.6% of Atari’s share capital. The willpower of the variety of Atari shares to be issued is predicated on the 20-day quantity weighted common value of Atari shares on Euronext Development Paris till the signing date of the acquisition settlement of €0.1169, in accordance with the phrases of the delegation to the board of administrators.

Nearly all of Digital Eclipse shareholders, holding in combination roughly 95% of Digital Eclipse capital, have agreed to a 1-year lock-up on their Atari shares as from the closing of the acquisition.

Atari shares are listed in France on Euronext Development Paris (ISIN Code FR0010478248, Ticker ALATA) and OTC Pink Present (Ticker PONGF).