A few weeks ago when the Mad Catz 1st Qtr financials came out, several member of the Gaming Nexus staff were having a conversation on how far and fast Mad Catz had fallen after they gambled big and lost on Rock Band 4. One topic came up how they probably needed to get back to their core business of fight sticks and start to shed some of the valuable properties they acquired over the years like Saitek and Tritton.
Well, fast forward to today and the first shoe has dropped, as Mad Catz announced that they have sold the Saitek brand and product lineup to Logitech in a $13 Million dollar cash transaction. This honestly should not have been unexpected, although the buyer probably was. Logitech has always had a strong foot in the peripheral game, but the Saitek lineup not only gives them another strong brand in PC gaming (assuming they do not just absorb it under the Logitech brand), but also access to a whole lineup of peripherals that they hadn’t delved into much.
As for Mad Catz, the transaction gives them a nice infusion of cash to keep the lights on and start putting resource back into their core Mad Catz products, and according to their President and CEO Karen McGinnis, the Tritton audio lineup. However, if Mad Catz continues to stumble to dig their way out of the hole they are in, don’t be surprised if that prized Tritton brand is also sold off to infuse more cash into the core company.
Mad Catz® Announces Sale of Saitek® Simulation Product Line to Logitech
SAN DIEGO, Sept. 15, 2016 (GLOBE NEWSWIRE) -- Mad Catz Interactive, Inc. (“Mad Catz” or “the Company”) (NYSE MKT:MCZ), a global provider of innovative entertainment products, today announced that it has sold its Saitek brand and the Saitek line of flight, space and farm simulation game controller assets to Logitech International S.A. (“Logitech”) (Nasdaq:LOGI) for $13 million in cash.
On September 15, 2016, Mad Catz entered into an Asset Purchase Agreement with Logitech pursuant to which Mad Catz sold certain assets to Logitech for an aggregate cash purchase price of $13 million. $11 million of the purchase price was paid in cash at closing and $2 million was deposited in escrow to fund any post-closing adjustments or claims. The assets sold by Mad Catz include specified trademarks, equipment and tooling, inventory, technical data and records, and other related documents necessary for the design, manufacture, marketing and distribution of interactive flight, space, and farm simulation controllers presently marketed and sold under the Saitek brand. Additionally, eight of the Company’s research and development employees accepted employment offers with Logitech.
Karen McGinnis, President and Chief Executive Officer of Mad Catz, stated, "After a thorough and deliberate process, we believe this sale to Logitech brings Mad Catz attractive and certain value for the flight, space and farm simulation line of Saitek products. We are pleased to find a company like Logitech that will lead Saitek into its next phase of growth and best support its strong acceptance within the flight simulation community while also allowing us to continue to leverage the world-class mice, keyboards and other products that were originally developed on the back of our acquisition of Saitek in 2007 and are now sold under the Mad Catz brand.”
“Our Board and management team are highly focused on enhancing shareholder value and we believe this transaction is consistent with our ongoing efforts, enabling us to improve our financial position and working capital to better support and grow our Mad Catz and Tritton video game accessories and headset brands. As we continue to evolve our business strategy to operate the Company more strategically while leveraging resources more efficiently, we are confident that the sale of the Saitek brand and product line, along with the other previously-disclosed Company-wide initiatives, will result in improved financial performance and shareholder value.”
The transaction was recommended by a special committee of the Company’s Board of Directors consisting solely of disinterested directors and approved by the full Board of Directors. Wedbush Securities acted as financial advisor to Mad Catz in connection with the transaction and Stout Risius Ross Advisors rendered a fairness opinion.