Video Game Publisher THQ Fills for Bankruptcy

From X-bit Labs: THQ, a leading developer and publisher of video games, this week announced that it entered into an asset purchase agreement with affiliates of Clearlake Capital Group, to acquire substantially all of the assets of THQ’s operating business, including THQ’s four owned studios and games in development. The sale will allow THQ to shed certain legacy obligations and emerge with the strong financial backing of a new owner with substantial experience in software and technology.

To facilitate the sale, THQ and its domestic business units have filed voluntary petitions under Chapter 11 of the U.S. bankruptcy court for the district of delaware. The company’s foreign operations, including Canada, are not included in the filings. The company has obtained commitments from Wells Fargo and Clearlake for debtor-in possession (DIP) financing of approximately $37.5 million, subject to court approval.

THQ will continue operating its business without interruption during the sale period, subject to court approval of THQ’s first-day motions. All of the company’s studios – Relic, THQ Montreal, Vigil and Volition – remain open, and all development teams continue. The company remains confident in its existing pipeline of games. THQ maintains relationships with some of the top independent development studios, such as Crytek, South Park Digital Studios, 4A games, Obsidian, and Turtle Rock, around the globe. As part of the sale, the company is seeking approval to assume the contracts of these studios, and Clearlake will assume these contracts.

“Clearlake is providing the company the money it needs to keep working on the products as the process plays itself out. Importantly, when the purchase is complete, Clearlake has committed to invest additional ample capital to let us finish the games we are making and continue making games going forward. In short, they are investing in a new start for our company,” said Jason Rubin, the president of THQ.

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