Midway Gets $75 Million For Expansion, Acquisitions

Major publisher and developer Midway has announced that it has completed the private placement of $75 million of convertible notes, due in 2026, to "qualified institutional buyers", and will receive net proceeds of approximately $72.3 million from the offering, in order to fund the Mortal Kombat creator's continuing operations. According to an official statement by the company, Midway "intends to use the proceeds from the offering for general corporate purposes, including working capital and capital expenditures." Interestingly, it's also noted: "The company may also use a portion of the net proceeds to fund possible future acquisitions of, or strategic alliances with, development companies or other companies involved in the development or production of video games." However, the company is still losing significant amounts of money as it pursues an aggressively next-gen focused strategies - for all of 2006, the report indicates that Midway expects to post a loss of nearly $66 million, a fairly hefty amount from just $155 million in revenue, and the placement should help with this loss. David F. Zucker, president and chief executive officer, commented of the announcement: "We believe this offering will help us to effectively execute our strategic plans and become one of the top-tier publishers in the next console cycle. We intend to continue to grow our revenue base by creating high quality next generation games, building our intellectual property portfolio, and expanding our publishing business, while we leverage our investment in a unified technology framework to reduce our costs."