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Atari to Acquire Nightdive Studios

Atari to Acquire Nightdive Studios - News

by William D'Angelo , posted on 23 March 2023 / 2,276 Views

Atari announced it has entered an agreement to acquire Washington-based Nightdive Studios.

The deal is expected to close in April with Atari acquiring the studio for $10 million with half of that being paid in cash and the other half in Atari shares. Atari will then pay up to another $10 million over the next three years depending on the future performance of Nightdive.

Nightdive Studios was founded in 2012 by former Sony Online Entertainment artists Stephen and Alix Kick. The studio has focused on remastering old games and making them playable on modern platforms. The developer has worked onTurok Dinosaur Hunter, Turok 2: Seeds of Evil, Doom 64, Quake, and System Shock:Enhanced Edition.

Read the press release below:

Agreement Signed to Acquire Nightdive Studios

Led by industry veterans Stephen Kick and Larry Kuperman, Nightdive is a full service development and publishing company with expertise in restoring, optimizing, and publishing classic video games. Nightdive has published over 100 titles and has garnered critical acclaim for their releases of seminal industry and fan-favorite titles including System Shock, DOOM 64, and Quake.

Nightdive’s most recent project is a remastered version of classic first-person shooter game System Shock, which is one of the most-anticipated retro releases of 2023. System Shock is now available for pre-order on Steam, GOG and Epic Games.

A key to the success of Nightdive is their proprietary KEX engine that makes classic games playable on modern hardware and gives the studio the ability to enhance and improve upon the original to meet the expectations of contemporary players. The studio’s reputation and deep industry knowledge have made them a go-to partner for some of the largest names in gaming and media and allowed them to develop a diversified portfolio of titles.

For the fiscal year ended December 2022, Nightdive has reported revenue of approximately US$3.0 million1. The founders own 87% of the Company’s shares while Wade Rosen, Chairman and CEO of Atari, owns a minority stake of 13%.

With this acquisition Atari will enrich its large library of owned IP, be able to leverage Nightdive’s proprietary technology, and utilize Nightdive’s publishing capabilities to support Atari’s retro-focused growth strategy.

This acquisition has been approved unanimously by the disinterested members of the board of Atari, it being specified that Wade Rosen did not participate to the vote.

Wade Rosen, Chairman and CEO of Atari, commented: “Nightdive’s proven expertise and successful track record in commercializing retro IP is well-aligned with Atari’s strategy and I am confident that their combined talent, technology and IP portfolio will contribute to Atari’s future success.”

Stephen Kick and Larry Kuperman, principals of Nightdive commented: “Nightdive and Atari have a long history together and we know that Atari shares our passion for retro games and our focus on producing high-quality new and remastered games that do justice to the original IP. As we look to grow our business and expand our capabilities, we could think of no better long-term partner than Atari.”

Terms and Timing of the Acquisition

The purchase price of Nightdive will consist of (i) an initial consideration of US$10 million payable half in cash and half in Atari shares at the closing of the acquisition (see below) plus (ii) an earn-out of up to US$10 million, payable in cash over the next three years based on the future performance of Nightdive.

It is expected that the acquisition of Nightdive will be completed in April 2023.

Financing of the Acquisition

  • The initial consideration will be paid half in cash (for US$5 million) and half in newly issued Atari ordinary shares (for US$5 million). The calculation of the number of Atari shares to be issued will be based on the 20-day volume weighted average price of Atari shares on Euronext Growth prior to the tenth day prior to the closing of the transaction.
  • The new Atari shares will be issued by the Company, represented by the board of directors of Atari, through a contribution in kind (apport en nature) of Nightdive shares to Atari acting pursuant to the 18th resolution of Atari’s combined shareholders’ meeting held on September 27, 2022 (the “AGM”) and on the basis of the reports of a court-appointed contribution auditor (commissaire aux apports) on the value of the contribution in kind and the fairness of the exchange ratio5.
  • The Company and Irata LLC, a holding company controlled by Wade Rosen (“Irata”), have agreed that Irata intends to provide bridge financing to Atari for the payment of the initial consideration, or $5 million.

Convertible Bonds

The Company intends to issue €30 million in Convertible Bonds through a public offering in France with a priority subscription period (offre au public avec délai de priorite) for all the shareholders of Atari.

  • A prospectus in relation to the Convertible Bonds offering will be prepared and subject to the AMF approval;
  • The issuance of the Convertible Bonds will occur shortly after the completion of the acquisition;
  • The Convertible Bonds will be issued with a priority subscription period for all shareholders for a period of three trading days (that does not result in the creation of negotiable rights) through a public offering in France (only);
  • The main shareholder of Atari, Irata LLC, holding 29.2% of the share capital of Atari, has indicated that it intends to subscribe its prorata share and to provide a firm underwriting for a number of Convertible Bonds equal to at least to 75% of the total amount of the offering;
  • It is the intent that Irata will undertake contractually and irrevocably vis-à-vis the Company not to convert its Convertible Bonds into Atari shares before at least the 25th of June 2025.

The amount raised through the Convertible Bonds will mainly be used to:

  • Reimburse the $5 million bridge financing provided by Irata in the context of the acquisition and finance future potential acquisitions Atari may consider;
  • Continued investment in growth initiatives, notably in the development of more than 12 new games expected to be launched in the next 18 months;
  • General cash requirements and financial flexibility necessary to pursue the transformation plan;
  • Reimburse the shareholder loans granted by Irata6 previously granted in accordance with its support commitment, and accrued interests on these loans.

A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.

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Darwinianevolution (on 23 March 2023)

Considering Atari recently filed for bankrupcty, and how little traction their products have had recently, why would anyone accept getting paid in Atari shares? Even if it's half of the payment, it's still really risky...

  • +4

Atari wants that System Shock remake money to help them get out of the gutter lol

  • +1
DonFerrari Darwinianevolution (on 23 March 2023)

Perhaps the company being bought is happy with the 10M in cash, problem is if the shares they receive makes they needing to pay back =p

  • +1
2zosteven (on 23 March 2023)


  • +2
Azzanation (on 23 March 2023)

Wow they are still around?

  • 0
DonFerrari (on 23 March 2023)

That seems a solid acquisition.

  • 0
EpicRandy (on 23 March 2023)

Atari as seen better days but I hope for the best to them, giving Nightdive focus this gives me hope to se even more of my favorite retro game be supported natively on current hardware.

  • -1
SanAndreasX EpicRandy (on 23 March 2023)

The Atari 50 collection was amazing. I'd like to see more stuff like Atari 8-bit games supported on modern hardware.

  • +3
CaptainExplosion (on 23 March 2023)

Acquired by Atari? This can't end well. -_-

  • -4
coolbeans CaptainExplosion (on 23 March 2023)

I wouldn't be so hasty to judge this case.

  • +1
CaptainExplosion coolbeans (on 24 March 2023)

I would after the Atari VGC disaster.

  • -3