Activision powers up with Shaba Games buyout

Game-maker Activision Inc. Tuesday announced that it has acquired software developer Shaba Games LLC, the company that has helped it develop a number of hit games, in an all-stock deal.

Based on Activision's share price at the close of trading Monday, the deal is valued at US$7.7 million.

The acquisition is aimed at bolstering Activision's ability to develop games for next generation console gaming systems, Activision said in a statement.

Activision, located in Santa Monica, California, makes video games for a host of console systems including Nintendo Co. Ltd.'s GameCube and GameBoy Advance, Microsoft Corp.'s Xbox, Sony Computer Entertainment Inc.'s PlayStation and PlayStation 2 and PCs. Among the company's marquee titles are the "Tony Hawk Pro Skater" and "Spider-Man" series, as well as "Return to Castle Wolfenstein."

Shaba Games worked with Activision on "Tony Hawk Pro Skater 3" and "Matt Hoffman's Pro BMX." The company was founded in 1997 and has 29 full-time employees at its Sausalito, California, headquarters.

Under the terms of the deal, Shaba's equity holders will receive 258,621 shares of Activision common stock, Activision said in a statement. Those shares were each worth $29.75 at the close of trading Monday. An additional 68,965 shares could be granted to Shaba stakeholders if certain performance requirements are met in coming years, Activision said.

Shaba will become a wholly owned subsidiary of Activision, with key management and development personnel signing long-term contracts with Activision, Activision said. Activision does not expect the deal to affect its financial forecast for fiscal years 2002 or 2003.

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