THQ Inc. (NASDAQ: THQI), which describes itself as a leading worldwide developer and publisher of interactive entertainment software, voluntarily filed for chapter 11 bankruptcy protection today in Wilmington, Delaware. The company also announced that, in connection with the bankruptcy filing, it had entered into a “stalking horse” agreement with affiliates of Clearlake Capital Group, L.P.
Pursuant to that agreement, Clearlake Capital has agreed to acquire substantially all of the assets of THQ’s operating business, including THQ’s four owned studios and games in development, for aggregate consideration of approximately $60 million, including a new $10 million note for the benefit of the company’s creditors. Clearlake Capital’s offer is subject to higher or otherwise better offers, which will be sought by THQ pursuant to a sale process under section 363 of the Bankruptcy Code. THQ will ask the Court for a schedule to complete the sale process in about 30 days.
In a press release announcing today’s actions, Brian Farrell, Chairman and CEO of THQ said: “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. 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.”
THQ is being advised by Centerview Partners LLC and FTI Consulting as its financial advisors and Gibson, Dunn & Crutcher as legal counsel. Clearlake is being advised by DLA Piper as legal counsel.
A copy of THQ’s first day bankruptcy court declaration, which provides more details about the company, the sale, and the bankruptcy filing, is embedded below.