Video game publisher, Take-Two Interactive Software, Inc. (TTWO), Monday said it has signed a definitive asset purchase agreement to sell its Jack of All Games distribution business to SYNNEX Corp.(SNX), a business process services company, for about $43.25 million. To effect the change, the company has also modified its first quarter and fiscal year 2010 forecast from the prior range to exclude Jack of All Games' business.
As per the terms of the deal, SYNNEX will acquire the Jack of All Games business, which primarily distributes third party interactive entertainment software, hardware and accessories in North America. Additionally, SYNNEX will also serve as a distributor for Take-Two's frontline and catalog titles in North America for Jack of All Games' customers.
Take-Two said the transaction, expected to be closed in the first calendar quarter of 2010, includes $36.50 million in cash and up to an additional $6.75 million based on the achievement of certain items.
Based on the revised forecast, for first quarter, Take-Two now expects a non-GAAP loss in a range of $0.45 to $0.55 per share, compared to the prior forecast that expected a loss of $0.40 to $0.50 per share. Revenues are now expected to range between $90 million and $140 million, down from the prior range of $210 million and $260 million.
On average, analysts polled by Thomson Reuters currently expects a loss of $0.47 per share on revenues of $227.32 million for the quarter. Analysts' estimate typically excludes one-time items.
For fiscal year 2010, the company now expects non-GAAP loss from continuing operations in the range of $0.48 to $0.68 per share, compared to the prior guidance expecting a loss in the range of $0.40 to $0.60 per share. Revenues are now expected to range between $710 million to $910 million, down from the prior range of $1.0 billion to $1.2 billion.
Street currently expects a loss of $0.48 on revenues of $1.13 billion for the year. As previously noted, the fiscal year 2010 guidance includes a non-GAAP net loss from the company's Major League Baseball business in the range of $30 million to $35 million, or $0.38 to $0.44 per share.
Take-Two also said it will report the results of its distribution operations separate from the company's ongoing publishing operations on a non-GAAP basis, beginning with its first quarter 2010 earnings release.
TTWO closed Monday's regular trading at $9.43, up $0.43 or 4.66%, on a volume of 4.30 million shares. In after-hours, the stock dropped $0.42 or 4.45%, to trade at $9.01.
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