Under the terms of the transaction, Hip acquired all of the outstanding shares of ARUSH upon issuance of 871,312 common shares of Hip of which 55,607 are being held in escrow for a period of up to one year. Under the terms of the escrow agreement, the principal shareholder of ARUSH is entitled to purchase the escrowed shares from Hip at a price of $1.50 per share. Pursuant to the Agreement and Plan of Merger, Hip shall be obligated to pay
additional purchase price consideration based on an earn-out arrangement through the period ended March 31, 2007. Hip expects the transaction to be accretive in fiscal 2005.
“Hip has been an incredible partner for us over the past few years and this acquisition will allow us to become an important part of the Hip Interactive family,” said Jim Perkins, President and CEO of ARUSH Entertainment. “Our focus will remain the same: publishing fun, exciting titles like Playboy: The Mansion across multiple platforms.”
Hip will acquire all of ARUSH’s rights to its current projects including the highly anticipated title Playboy: The Mansion™ for Xbox, PS2 and PC and the Fear Factor: Unleashed™ video games. “We have been partnering with ARUSH for a number of years now and are impressed with their ability to work with top brands to develop great video game titles,” stated Arindra Singh, President & Chief Executive Officer of Hip Interactive. “The acquisition of ARUSH builds on our strategy of growth in our Hip Games™ division. ARUSH’s ability to source and license titles, along with management’s strong industry relationships will enable us to broaden Hip’s North American publishing presence.”