Summary
Take-Two Interactive Software, Inc. (TTWO) filed an 8-K on May 26, 2022, to report the completion of its acquisition of Zynga Inc. The acquisition, which closed on May 23, 2022, involved a merger where Zynga became a wholly-owned subsidiary of Take-Two. This transaction has significantly altered Take-Two's capital structure and business operations. The filing also details significant financing activities, including the establishment of a new $500 million unsecured five-year revolving credit facility, replacing a previous agreement. Additionally, Take-Two addressed the convertible notes issued by Zynga, outlining how these notes will be assumed by Take-Two, with conversion rights now entitling holders to a mix of Take-Two common stock and cash. These events mark a pivotal moment for Take-Two, integrating a major mobile gaming entity and establishing new credit arrangements.
Key Highlights
- 1Completion of Zynga Acquisition: Take-Two has successfully acquired Zynga in a transaction that closed on May 23, 2022. Zynga now operates as a wholly-owned subsidiary of Take-Two.
- 2New Credit Facility Established: A new $500 million unsecured five-year revolving credit facility was entered into, replacing the previous credit agreement. This facility includes sublimits for letters of credit and foreign currency borrowings, with an option for expansion.
- 3Synergistic Conversion of Zynga Notes: Zynga's outstanding convertible notes (2024 and 2026 maturities) have been effectively converted. Holders now have the right to convert into a combination of Take-Two common stock and cash, reflecting the acquisition's terms.
- 4Termination of Capped Call Transactions: Zynga entered into termination agreements for its previously established capped call transactions related to its convertible notes, with associated cash payments expected from the counterparties.
- 5Increased Authorized Share Capital: Take-Two amended its certificate of incorporation to increase the authorized shares of common stock to 300,000,000 and preferred stock to 5,000,000 to accommodate the acquisition.
- 6Delisting of Zynga Stock: Zynga's common stock ceased trading on the NASDAQ and was delisted effective May 23, 2022.
- 7Board of Directors Additions: Two former Zynga directors joined the Take-Two Board of Directors following the closing of the acquisition.