Hasbro to acquire computer publisher Microprose for 1.2 times revenue

Weekly Corporate Growth Report, Aug 17, 1998

The Deal: Hasbro has entered into a definitive agreement to acquire Microprose Inc., a 17-year veteran publisher of popular simulation, 3-D action and strategy games for the personal computer, for $70 million in cash, or $6/share. The purchase price includes some debt and redeemable preferred stock. Upon completion of the tender offer, Hasbro Interactive, a wholly owned subsidiary of Hasbro, will be merged with MicroProse. Hasbro Interactive is Hasbro's leading entertainment software publishing arm. Prior to a one-time charge in 1998 relating to the expensing of purchased in-process research and development, Hasbro expects that the deal will not be dilutive to earnings this year, and will be accretive beginning in 1999.

Discussion: The deal will significantly enhance Hasbro Interactive in three key strategic growth areas: brands and content, R&D assets, and European distribution. Hasbro will now be able to compete in virtually all major PC game categories and the company looks forward to expanding many of Microprose's games to multiple hardware platforms.

Microprose has more games in the Computer Gaming Hall of Fame than any other publisher, with 10 honors. It also has technologies that are critical to PC entertainment software development, including 3-D simulation, artificial game intelligence, and networked game-play capabilities.

Hasbro Interactive is a leading all-family interactive games publisher. It was formed in 1995 to bring to life on the computer the deep library of toy and board games of its parent company Hasbro, Inc.