Video game maker THQ Inc said on Wednesday it filed for bankruptcy, and private investment firm Clearlake Capital Group has offered to buy its assets.
Affiliates of Clearlake Capital Group, L.P. will acquire substantially all of the assets of THQ's operating business, including THQ's four owned studios and games in development, the company said.
"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," THQ added.
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 said it had obtained commitments from Wells Fargo and Clearlake for debtor-in possession (DIP) financing of approximately $37.5 million, subject to Court approval.
THQ said it would 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 remain open, and all development teams continue.
"The sale and filing are necessary next steps to complete THQ's transformation and position the company for the future, as we remain confident in our existing pipeline of games, the strength of our studios and THQ's deep bench of talent," said Brian Farrell, Chairman and CEO of THQ. "We are grateful to our outstanding team of employees, partners and suppliers who have worked with us through this transition. We are pleased to have attracted a strong financial partner for our business, and we hope to complete the sale swiftly to make the process as seamless as possible."
Clearlake has agreed to serve as the "stalking horse bidder" for a Section 363 sale process, which allows other interested parties to come forward with competing bids. Aggregate consideration offered by Clearlake for the purchase totals approximately $60 million, including a new $10 million note for the benefit of the company's creditors. The company is asking the Court for a schedule to complete the sale process in about 30 days.