It’s been a rough year of THQ. It recorded continuous losses, closed its international branches including here in Melbourne, delayed many of its tent pole titles and, most recently, it haddefaulted on one of its loans. It was little surprise, then, to hear this morning that THQ had declared Chapter 11 Bankruptcy in the district of Delaware. However, this move was made to facilitate a purchase agreement with affiliates of Clearlake Capital Group. The private equity firm purchased THQ as a ‘stalking horse bidder’ for $60 million (USD), including a $10 million (USD) credit note for THQ’s creditors.
THQ said that is will continue to operate without interruption during the 30-day sale sale period, “All of the company’s studios remain open, and all development teams continue.”
“The sale and filing are necessary next steps to complete THQ’s transformation and position the company for the future, as we remain confident in our existing pipeline of games, the strength of our studios and THQ’s deep bench of talent,” said Brian Farrell, Chairman and CEO of THQ, in a press release issued this morning, “We are grateful to our outstanding team of employees, partners and suppliers who have worked with us through this transition. We are pleased to have attracted a strong financial partner for our business, and we hope to complete the sale swiftly to make the process as seamless as possible.”
Further to this, the President of THQ Jason Rubin explained the reasoning for the bankruptcy declaration, that it is a safety net for US companies. In his blog post, he reassured everyone that THQ’s major games will still be coming out: “…You can still pre-order Metro: Last Light, Company of Heroes 2, and South Park: The Stick of Truth. Our teams are still working on those titles as you read this, and all other rumored titles, like the fourth Saints Row, the Homefront sequel, and a lot more are also still in the works”
If you wanted to know what a stalking horse bidder is, it’s basically the selection of a buyer by a bankrupt company; it allows for a company to choose its buyer without having to face low-ball bids. To put it another way,imagine Clearlake Capital is Daryl Braithwaite in this song: