Video game publisher Take-Two Interactive will pay roughly $956 million to acquire United Kingdom-based game developer Codemasters, a deal that lets Take-Two bolster its portfolio of racing games.
Codemasters develops several games but its standout titles are an officially licensed Formula 1 racing game and the “Colin McRae Rally” game. The Codemasters team said in a recent earnings release that its shares jumped more than 60% since the beginning of this year as gamers in the U.K. — and worldwide — remain stuck at home under lockdown.
The deal was worth 726 million GBP — about $956 million — and is expected to close in the first quarter of 2021. Codemasters’ CEO Frank Sagnier and chief financial officer Rashid Varachia will remain on the Codemasters team and lead the company’s business as a subsidiary under Take-Two Interactive’s 2K publishing label.
Racing games are one segment Take-Two has yet to fully capitalize on. It publishes hit action franchises including the “Grand Theft Auto” and “Red Dead Redemption” series through Rockstar Games as well as shooter-oriented games under the Private Division label. Its sports simulation games published under the 2K label, including the recently released “NBA 2K21,” boosted the company’s sales in its fiscal second quarter.
“We are exceedingly pleased to announce this recommended transaction with the board of Codemasters,” Take-Two CEO Strauss Zelnick said in a statement Tuesday. “Codemasters has a renowned history of creating some of our industry’s most beloved and commercially successful racing franchises, and we believe that their offerings will be highly complementary to our sports portfolio and enhance further our organization’s long-term growth… we look forward to sharing in our vision to deliver the highest quality entertainment experiences and aim to be the most innovative, creative and efficient company in our industry.”
Take-Two recently beat earning expectations for its second quarter. Net income for the period was $99.3 million, up 38% from $71.8 million this time last year, the company reported last week.