GT Interactive Software Corp, the Palo Alto, California based computer games publishing and distribution house is moving further away from its low margin distribution business and into the more lucrative but higher risk games development market with the $250m share based acquisition of rival company MicroProse Inc. GT will offer 0.7 shares of its own stock, valued at approximately $8.62, for each MicroProse share. MicroProse, which made its name in the flight simulation and strategy game genre, was originally purchased by Spectrum HoloByte Inc which then reverted to the better known MicroProse name. The company has just released preliminary figures for its second quarter showing expected losses in the range of $1.6 to $2.3m on estimated revenue of $19m to $21m. The purchase will take the number of software developers working under the GT Interactive name to around 500 and according to the company, the deal will make GT the second biggest games developer in the US behind the mighty Electronic Arts Inc. Combined annual revenues are predicted to be over $500m. Since 1996, GT has purchased seven games software companies. GT’s shares fell one dollar to $11.38 while MicroProse climbed a dollar to $7.88.
