PARIS, FRANCE: Atari, one of the world’s most iconic consumer brands and interactive entertainment producers, has entered into an agreement to acquire Digital Eclipse Entertainment Partners Co (Digital Eclipse), a game development studio originally founded in 1992 focused on the digital restoration of classic video games, based in Emeryville, California.
The acquisition of Digital Eclipse will allow Atari to expand its internal development capabilities and utilize Digital Eclipse’s industry-leading experience and proprietary technology. In joining Atari, Digital Eclipse will grow its business and capabilities by expanding its development capacity and access to world-class IP and will leverage Atari’s management expertise.
By adding Digital Eclipse, along with Nightdive Studios in May 2023, Atari will be able to further support its retro-focused growth strategy.
Since inception, Digital Eclipse has produced over 250+ games and developed long-standing relationships with leading publishing and development partners in the industry to deliver amazing video games and collections. With its innovative proprietary technology, Digital Eclipse is now leading this category in sales, critical reception and innovation.
Wade Rosen, Chairman and CEO of Atari commented: “Digital Eclipse is the best in the world at what they do. They have a deep love and respect for the history of the games industry, and are renowned for developing critically acclaimed projects based on historic franchises. Digital Eclipse, along with Nightdive, are in perfect alignment with Atari’s DNA and renewed purpose. I’m personally excited to see where we can push the boundaries of retro innovation together.”
Andrew Ayre, Chief Executive Officer, commented: “Atari and Digital Eclipse share the same ethos when it comes to celebration and preservation of gaming history. It’s an exciting combination, and I am confident this will serve Digital Eclipse and our fans extremely well as we grow our business and expand our capabilities.”
Mike Mika, President and Creative Director commented: “Our experience collaborating on Atari 50: The Anniversary Celebration was revelatory. The trust that Atari showed our team, and our clear mutual love and respect for the content, positioned us to produce something truly remarkable. I know Atari will continue to champion our approach and that we will be bringing fans exciting new projects for years to come.”
The purchase price of Digital Eclipse will consist of an initial consideration of US$6.5 million payable at the closing of the acquisition, of which US$4.0 million in cash and US$2.5 million in newly issued Atari ordinary shares, as well as a remaining earn-out of up to $13.5 million, payable in cash over the next ten years based on future performance of Digital Eclipse.
It is expected that the acquisition of Digital Eclipse will be completed in the coming days.
In addition to the cash consideration, Atari will also acquire a portion of the shares in Digital Eclipse directly and the purchase price of such shares corresponding to US$2.5 million (€2.4 million) will be paid by way of set-off against the issuance of newly issued Atari SA shares.
The reserved capital increase will result in the issuance of 20,165,794 new Atari shares. As a result, Digital Eclipse shareholders will together hold upon completion of the capital increase 4.6% of Atari’s share capital4. The determination of the number of Atari shares to be issued is based on the 20-day volume weighted average price of Atari shares on Euronext Growth Paris until the signing date of the purchase agreement of €0.1169, in accordance with the terms of the delegation to the board of directors.
The majority of Digital Eclipse shareholders, holding in aggregate approximately 95% of Digital Eclipse capital, have agreed to a 1-year lock-up on their Atari shares as from the Closing of the acquisition.
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