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THQ auction: Major franchises, studios acquired; now up to U.S. bankruptcy approval

23 January 2013

Some of the most popular franchises from THQ have survived the company's long financial struggles. While they will find new homes at other companies, some employees are left out of work and the future of some studios is up in the air. Popular franchises like Metro, Saints Row, and Homefront and their associated studios are now in the hands of new companies following the recent auction. 

Just about all of the following information is pending approval from the U.S. Bankruptcy Court.

A letter sent to THQ employees seems to spell out what will happen to some of the top franchises and studios. As previously reported, Ubisoft purchases THQ Montreal and plans to put out South Park: The Stick of Truth along with Obsidian. There is also an unannounced IP on the way.

According to Twitter posts from Distressed Debt Investing, Crytek has purchased Homefront and is working on Homefront 2, while Take 2 nabbed Evolve. Koch Media has agreed to purchase Volition, the Saints Row and Metro series' studio. Deep Silver will lead further development and marketing on Saints Row and Metro franchises. Sega plans to purchase Relic Entertainment, the makers of Company of Heroes.

THQ, as a publisher, along with Vigil Games (makers of the Darksiders franchise), is said not to be in any sales agreements at this time, but there is talk that all of that could soon change. It's also believed that Destroy All Humans and de Blob are not under any sales agreements either.

Ubisoft put up $3.2 million for the South Park game and another $2.5 million for THQ Montreal, while Koch Media spent $5.8 million for Metro and $22.3 million for Volition. Crytek spent $500,000 for rights to Homefront. According to reports from Polygon, SEGA put a bid of $26.6 million forward for Relic while ZeniMax Media's bid was $26.3 million.

While this a lot of money was spent on these studios and franchises, many employees have lost their jobs as a result.

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Below is a letter, obtained by Kotaku, from THQ CEO Brian Farrell and president Jason Rubin, sent to all THQ employees:

To All THQ Employees:
We now have the answers we've been seeking through our financial restructuring and Chapter 11 case. While much will be written, here are the facts of the bids and auction that occurred:

  • Yesterday morning, we received a competing bid for the operating business, along with Clearlake's offer, and numerous offers for separate assets.

 

  • During an auction process that lasted over 22 hours, the final conclusion was that the separate-asset bids would net more than a single buyer for the majority of the company.

 

  • Shortly, we will, present the results to the U.S. Bankruptcy Court, which must concur with our assessment.

 

  • The proposed sales of multiple assets is as follows :

 

  • Sega agreed to purchase Relic
  • Koch Media agreed to purchase Volition and Metro
  • Crytek agreed to purchase Homefront
  • Take 2 agreed purchase Evolve and
  • Ubisoft agreed to purchase Montreal and South Park


We expect these sales to close this week.
Some assets, including our publishing businesses and Vigil, along with some other intellectual properties are not included in the sale agreements. They will remain part of the Chapter 11 case. We will make every effort to find appropriate buyers, if possible.

What this means for employee

We expect that most employees of the entities included in the sale will be offered employment by the new owners. However, we cannot say what these owners may intend, and there will likely be some positions that will not be needed under the new ownership. You should receive notice this week or early next week if the new owners intend to extend employment to you. Please note that the terms of your new employment, including pay and benefits, may be different from the current terms of your employment with THQ.
If you are an employee of an entity that is not included in the sale, we regret that your position will end. A small number of our headquarters staff will continue to be employed by THQ beyond January 25 to assist with the transition. THQ has sufficient resources to pay these employees for work going forward, and we will be contacting these employees immediately to ensure their continued employment during this transition period. We are requesting the ability to offer certain severance pay to minimize disruption for employees of non-included entities as they determine the next steps in their careers.
We know you will have many questions about this news. We'll be meeting tomorrow when we return to talk through this announcement and to answer any questions you have. You will receive a benefits fact sheet and FAQs with answers to some questions that may be on your mind. Please review these materials closely.

A personal note
The work that you all have done as part of the THQ family is imaginative, creative, artistic and highly valued by our loyal gamers. We are proud of what we have accomplished despite today's outcome.
It has been our privilege to work alongside the entire THQ team. While the company will cease to exist, we are heartened that the majority of our studios and games will continue under new ownership. We were hoping that the entire company would remain intact, but we expect to hear good news from each of the separate entities that will be operating as part of new organizations.
For those THQ employees who are part of entities that are not included in the sale, we are confident that the talent you have displayed as part of THQ will be recognized as you take the next steps in your career.
Thank you all for your dedication and for sharing your talent with the THQ team. We wish you the best of luck and hope you will keep in touch.
Sincerely,
Brian Farrell Chief Executive Officer
Jason Rubin President

(Thanks: claud3)


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