Video games publisher Ubisoft has sealed an agreement with top selling author Tom Clancy to acquire all IP rights to his name for use in games and associated products including related books, movies and merchandise.
The price of the all-cash acquisition was not disclosed. Post acquisition, Ubisoft expects to have a net cash position of around E130m by the end of fiscal 2007-08, compared to a previous expectation of approx E150m.
Additional payments will be made as well in fiscal 2008-09 and fiscal 2009-10.
On the basis of past performance of Tom Clancy branded video games, and excluding any potential contribution coming from sales of associated products, the royalty savings generated by the acquisition are estimated to have an average positive impact on Ubisoft's operating income of a minimum of E5m per year.
"After ten years of a highly successful collaboration which has seen the creation of blockbusters that set standards in the video game industry, such as Tom Clancy's Splinter Cell, Tom Clancy's Ghost Recon and Tom Clancy's Rainbow Six, today, acquiring the perpetual property rights of the Tom Clancy name for video games and related project is a major event," said Yves Guillemot, CEO of Ubisoft.
"The Tom Clancy brand is recognised around the world for offering exciting video games, films and books. Capitalising on the strong franchises that we've built over the past ten years, we will take the Tom Clancy game brand to the next level of the global entertainment industry."