Will Gain Rights to Develop and Publish Interactive Games Based on Current and Future Hasbro Properties Through Long-Term Licensing Agreement
Infogrames will purchase 100% of the common stock of Hasbro Interactive and Games.com for $100 million - comprised of $95 million in Infogrames Entertainment SA securities (approximately 4.5 million common shares) and $5 million in cash. In addition, Hasbro will receive an annual guarantee from Infogrames based on sales generated from the licensing agreement. The agreements are subject to the approval of the shareholders of Infogrames, regulatory approval and other customary closing conditions. The companies expect the deal to close early in the first calendar quarter of 2001.
"Infogrames and Hasbro are truly poised to become worldwide leaders in the digital entertainment market," said Bruno Bonnell, Chairman and CEO of Infogrames. "Infogrames' external growth strategy consists of three requirements: a willingness of the prospective partner's management to share our strategic vision, a complementary set of skills and products, and finally, value for our shareholders. The Hasbro Interactive and Games.com acquisition meets these criteria," said Mr. Bonnell. "Infogrames' access to Hasbro's long list of well-known properties fits perfectly with our long-term publishing strategy to become the leader in family entertainment. The terms are beneficial for Infogrames Entertainment, since they have no direct impact on the company's future investment capacity."
"This arrangement with Infogrames is a very positive one for Hasbro on many different levels," said Alan Hassenfeld, Hasbro's Chairman and CEO. "First, we have aligned ourselves with a premier player in the interactive arena. Second, this strategic agreement with Infogrames meshes with our strategy of reducing costs as we focus on consistently delivering profits going forward. Third, this arrangement will provide a continuing revenue stream to Hasbro over the long-term through Infogrames' expertise in leveraging our current and future properties."
The agreement is comprised of three main elements:
Infogrames Entertainment's acquisition of 100% of the common stock of Hasbro Interactive, a subsidiary of Hasbro, Inc.
The acquisition gives Infogrames a catalog of titles based on well-known properties, including:
The MICROPROSE brand and titles, including the international hit CIVILIZATION, FALCON, and ROLLER COASTER TYCOON, the number one selling PC game in the US according to PC DATA'S latest report. The legendary ATARI name and properties, such as CENTIPEDE, MISSILE COMMAND, and the historic PONG, which pioneered the video game revolution.
The exclusive rights to develop and publish interactive games based on current and future Hasbro, Inc. properties, including:
The interactive versions of popular Hasbro board games, which include MONOPOLY, SCRABBLE1, CLUE, RISK, and BOGGLE. The interactive versions of children's games and toys, such as MR. POTATO HEAD, TONKA TRUCKS, ACTION MAN, MY LITTLE PONY, and CANDYLAND. The massively multi-player game DUNGEONS AND DRAGONS.
Under the terms of the agreement, Infogrames gains the rights through a licensing agreement with Hasbro to develop games based on Hasbro properties for a period of 15 years plus an option for an additional 5 years based on performance, on all existing and future digital interactive formats. Terms of the licensing agreement are consistent with other traditional Infogrames' Entertainment licensing agreements.
These formats include: current and next-generation video game consoles such as Sony PlayStation2, Microsoft Xbox, Sega Dreamcast, and Nintendo GameBoy Advance and GameCube, personal computers, broadband networks, interactive television, cellular telephones, arcade, and hand-held devices (PDAs). In keeping with its global multi-platform strategy, Infogrames will leverage Hasbro's unmatched content by developing titles on a variety of platforms that appeal to a global market.
These Hasbro Interactive brands, together with Hasbro's owned brands, make up a catalog of more than 200 family titles that are being managed by a team of mass market product experts who have helped Hasbro Interactive succeed in becoming the third largest PC publisher in the U.S.
Additionally, approximately 60 titles are currently in development, including PlayStation2 and Xbox versions of franchises from HASBRO, MICROPROSE and ATARI: ZOO TYCOON, MONOPOLY, MICRO MACHINES, TWISTER, CIRCUS MAXIMUS, CIVILIZATION, and GRAND PRIX 4.
Infogrames will also seek out additional partnership opportunities with telecommunications providers, media companies and hardware manufacturers to bring these franchises to other platforms.
The long term licensing agreement combines Hasbro's expertise in developing successful mass-market properties and Infogrames' expertise in bringing top properties to the digital interactive market.
Hasbro's catalog of games and toys will be strengthened by their digital interactive counterparts, published and globally distributed by Infogrames. In addition, Infogrames' titles based on Hasbro properties will benefit from Hasbro's powerful marketing programs for their games and toys.
Acquisition of Games.com
As part of the agreement, Infogrames acquires Games.com, an online games portal launching in early 2001. Games.com has already attracted over four million visitors to its site, with more than one million people having already registered to receive information about its launch.
At its launch, Games.com will allow visitors to play more than 30 online games based on Hasbro properties, some of which include MONOPOLY, CLUE, SCRABBLE1, ASTEROIDS, and RISK. In addition, visitors to the site can find news, information, tips and hints about games featured on Games.com.
Visitors to the site will also have the ability to chat with other players and participate in tournaments based on widely recognized games from the Hasbro catalog. Games.com's revenue strategy includes e-commerce, sponsorships and individual subscriptions. Infogrames plans to extend Games.com to broadband users in the future.
JP Morgan & Lazard Freres advised Infogrames and Salomon Smith Barney advised Hasbro in this financial transaction.
For additional information, Infogrames has posted a detailed presentation on today's announcement at www.infogrames.com and www.infogrames-corporate.com.
1 In the United States only.
Infogrames Entertainment SA (Euronext 5257) is a worldwide leader in the interactive entertainment software industry. Headquartered in France, the company publishes and distributes award-winning computer and video games for the PlayStation® game console, PlayStation® 2 computer entertainment system, Microsoft® Xbox, Nintendo® 64, Nintendo® Game Boy® Color, Sega® DreamcastTM, Macintosh®, and personal computer platforms, as well as interactive digital television platforms, mobile smart devices (WAP, HDML) and in-flight entertainment systems. Founded in 1983 by chairman and CEO Bruno Bonnell, Infogrames has published many award-winning franchises in its 17-year history, such as Alone In The DarkTM, Test Drive®, DriverTM, Deer HunterÒ, OddworldTM, UnrealÔ, and V-RallyTM. The company is also known for its best-selling and award-winning line of children's entertainment software from Humongous Entertainment® starring Putt-Putt®, Freddi FishTM, Pajama Sam® and SPY FoxTM, as well as its successful Macintosh publishing label, Macsoft, the number one publisher of Macintosh entertainment software. In addition, Infogrames has a number of key strategic licenses including Warner Bros. Looney TunesTM, Nickelodeon's Blue's CluesTM, AM General Hummer®, and Harley-Davidson®. Infogrames distributes its games in approximately 60 different countries worldwide. For more information, visit Infogrames' US Web site at www.us.infogrames.com.
Based in New York, NY, Infogrames, Inc. (Nasdaq: IFGM) is a majority-owned subsidiary of Infogrames Entertainment SA and serves as the headquarters for the company's operations in North America.
Hasbro is a worldwide leader in children's and family leisure time entertainment products and services, including the design, manufacture and marketing of games and toys ranging from traditional to high-tech. Both internationally and in the U.S., its PLAYSKOOL, TONKA, SUPER SOAKER, MILTON BRADLEY, PARKER BROTHERS, TIGER and WIZARDS OF THE COAST brands and products provide the highest quality and most recognizable play experiences in the world.
SAFE HARBOR STATEMENT
Certain statements contained in this release contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words or phrases such as "anticipate", "believe", "could", "expect", "intend", "may", "planned", "potential", "should", "will" and "would". Such forward-looking statements are inherently subject to known and unknown risks and uncertainties. Actual actions or results may differ materially from those expected or anticipated in the forward-looking statements. Specific factors that might cause such a difference include, but are not limited to, third party actions or approvals that could delay or increase the cost of implementation of the strategic agreement or alter actions and reduce actual results; the risk that anticipated benefits of the strategic agreement may not occur or be delayed or reduced in their realization; and with respect to the online game site initiative, technical difficulties in adapting games to online format and establishing the online game site that could delay or increase the cost of the site becoming operational; the acceptance by consumers of the games and other products and services to be offered at the site; competition from other online game sites and other game playing formats; and the fact online game revenues may not be sufficient to cover the significant advertising and other expenditures required or the support, service and product enhancement demands of online users. There is no undertaking of an obligation to make any revisions to the forward-looking statements contained in this release or to update them to reflect events or circumstances occurring after the date of this release.