S&P rates Take-Two BBB

S&P said it gave Take-Two Interactive Software Inc. a BBB issuer rating.

“The BBB issuer credit rating reflects our expectation that Take-Two's leverage will remain below 2x and that it will continue to generate strong operational metrics. Its largest core franchises, NBA 2K and Grand Theft Auto (GTA), provide Take-Two the flexibility to invest substantially into research and development to further develop franchises and create new ones, which is instrumental to success in the video game industry,” the agency said in a press release.

Take-Two is is acquiring Zynga Inc. “The acquisition of Zynga will diversify the company's revenue profile. Prior to the acquisition, GTA and NBA 2K generated approximately 58% of the company's total revenue, with the addition of Zynga this concentration falls to roughly 42%. Additionally, Zynga will add to the platform diversity of the combined company, with about half of pro forma bookings coming from Mobile, up from only 11% for Take-Two stand alone,” S&P said.

The outlook is stable.

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