"The sale of the Joytech assets is consistent with one of the key goals we established in our 100 Day Plan: to develop strategic alternatives for any operations that we determined to be outside our core publishing business," said Ben Feder, Take-Two's Chief Executive Officer. "We are particularly pleased that we accomplished this goal in a manner that will allow substantially all of our Joytech employees in the U.S. and U.K. to join Mad Catz, which is a highly respected provider of video game peripherals."
Joytech manufactures third-party video game peripherals and audiovisual accessories with retail distribution in Europe and North America. The addition of Joytech personnel will allow Mad Catz to initiate a European product development effort and bolster Mad Catz' sales team. The European market has been a key growth driver for Mad Catz and this acquisition reinforces that strategic initiative.
Mad Catz anticipates that the acquisition will add at least $10 million in annual revenue, leverage Mad Catz' existing infrastructure, add several new customers and products and expects the acquisition to be accretive within the first year of completion. The Company intends to finance the acquisition through a combination of cash on hand and borrowings under its existing credit facility.
Commenting on the transaction, Darren Richardson, President and Chief Executive Officer of Mad Catz, said, "This transaction is consistent with our strategy to continue to grow profitably, in part by diversifying our product line-up and geographic reach. Joytech's strong presence in Europe and growing presence in North America are expected to complement our current operations and further enhance our worldwide distribution network enabling Mad Catz to more efficiently deliver a larger portfolio of innovative gaming accessories to our customers worldwide.
"We remain committed to pursuing additional acquisition opportunities that can enhance shareholder value by leveraging our existing operating platform, further diversifying Mad Catz' product offerings and market reach, and solidifying our role as a market leader throughout the current console transition and beyond."
The Joytech sale is not expected to be material to Take-Two's financial results.