Mad Catz Acquires Saitek(TM), a Leading Worldwide PC Games Peripheral Provider, for $30 Million



    Strategic Diversification Complements Mad Catz' Leadership in Console
Game Peripherals and Further Expands International Footprint

    SAN DIEGO, November 14 /CNW/ - Mad Catz Interactive, Inc. (AMEX/TSX:
MCZ), a leading third-party interactive entertainment accessory provider,
announced today that consistent with its strategy to further diversify its
products and geographic distribution capabilities, it has entered into a
definitive agreement to acquire 100 percent of the shares of the private
holding company that owns Saitek's worldwide operations. Saitek is a leading
worldwide provider of PC games accessories, PC input devices, multimedia audio
products, chess and intelligent games. In particular, Saitek enjoys a
leadership position in flight simulation controllers and has established a
strong position in keyboards for PC games. In its latest fiscal year ended
February 28, 2007, Saitek generated over $43 million of net sales and its
gross margins exceeded those generated by Mad Catz in its latest twelve
months. Mad Catz expects the acquisition to be accretive to its fiscal 2008
earnings and cash flow.

    Under the terms of the agreement, the $30 million purchase consideration
is subject to working capital adjustment and is comprised of $15.5 million in
cash from Mad Catz' cash on hand and borrowings under the Company's existing
credit facility, as well as the issuance to the seller by Mad Catz of $14.5
million of convertible notes. The notes bear interest at a rate of 7.5%
payable at maturity and are convertible at the seller's option into common
shares of Mad Catz Interactive, Inc. at $1.42 per share. The conversion price
represents a 15% premium to the average closing share price of MCZ shares over
the last 15 trading days. $4.5 million of the notes mature in two years and
$10 million of the notes mature in three years.

    Saitek's product lines include PC games accessories, PC input devices,
multimedia audio products, chess and intelligent games. In addition to
representing a strategically complementary product line to Mad Catz' broad
range of console videogame offerings, Saitek's comprehensive range of PC
peripherals allows Mad Catz to further strengthen its retail distribution
network, particularly in Europe, where Saitek generates more than fifty
percent of its revenues. Saitek's 120 employees in product development, sales
and marketing, distribution and finance/administration are expected to join
Mad Catz. Saitek has offices in the United Kingdom, Germany, France, United
Sates, Hong Kong and the Peoples Republic of China.

    Commenting on the transaction, Darren Richardson, President and Chief
Executive Officer of Mad Catz, said, "PC games peripherals is a category
closely adjacent to our core console business and we are thrilled to be adding
one of the world's leading providers to the Mad Catz family. Saitek
significantly enhances Mad Catz' position as one of the world's leading games
peripherals companies and provides us an entree into the businesses of PC
mice, keyboards and speakers and electronic chess and intelligent games.

    Saitek has world-class product development and sales teams, one of the
best brands among consumers in the industry and a diversified portfolio of
highly-successful products. Its outstanding vendor operations personnel in
China and administrative personnel throughout the company will not only help
us grow Saitek's PC businesses, but will also support Mad Catz' continuing
growth initiatives on a global basis."

    Eric Winkler, Saitek's founder, commented: "Joining Saitek with Mad Catz
is a truly complementary step that leverages the strengths of each side, gives
the combined business a new scale, and strengthens the relationships with both
suppliers and customers. I am proud of what the Saitek team has achieved in
its 28 years and I thank all those who made it possible. We look forward with
confidence to the success of the combined team in the years ahead, and wish
them the best of good fortune."

    Mr. Richardson added, "Although we expect to achieve operational
efficiencies due to the scale of the combined entity, we believe that the
upside is inherent in the future growth potential and not on a cost cutting
basis. We intend to identify opportunities to apply Saitek's brands,
intellectual property, products and skills in the console market as well as
identify opportunities to apply Mad Catz' brands, intellectual property,
products and skills in the PC market.

    Just two months after our acquisition of the assets of Joytech, joining
forces with Saitek is another example of how we are executing on our strategic
plan to grow our business accretively, with the mission of increasing
shareholder value by leveraging our core competencies in the design,
development, manufacturing, marketing and distribution of interactive
entertainment accessories and products."

    About Mad Catz Interactive, Inc.

    Mad Catz is a leading provider of innovative peripherals for the
worldwide interactive entertainment industry. Mad Catz designs and markets
accessories under its Mad Catz, GameShark and Joytech brands for video game
systems, publishes video game software, including the industry leading
GameShark video game enhancements, and recently began shipping its AirDrives
and AirDrives for Kids interactive earphones. Mad Catz has distribution
through most leading retailers offering interactive entertainment products.
Mad Catz has its operating headquarters in San Diego, California and offices
in Canada, Europe and Asia. For additional information go to www.madcatz.com.

    About Saitek

    Saitek designs and manufactures consumer electronics products which work
together to improve the user's multimedia, gaming and communications
experiences. Constant innovation, superior technology and a high degree of
functionality make Saitek products the choice of computer users around the
world. The Saitek product range today includes mice, keyboards, headsets, PC
gaming controllers, as well as other PC peripherals. The latest addition is a
new family of innovative and practical audio products designed to improve
users' digital entertainment experiences. For additional information go to
www.Saitek.com

    Safe Harbor for Forward Looking Statements: This press release contains
forward-looking statements about the Company's business prospects that involve
substantial risks and uncertainties. The Company assumes no obligation to
update the forward-looking statements contained in this press release as a
result of new information or future events or developments. You can identify
these statements by the fact that they use words such as "anticipate,"
"estimate," "expect," "project," "intend," "should," "plan," "goal,"
"believe," and other words and terms of similar meaning in connection with any
discussion of future operating or financial performance. Among the factors
that could cause actual results to differ materially are the following: the
ability to maintain or renew the Company's licenses; competitive developments
affecting the Company's current products; first party price reductions; the
ability to successfully market both new and existing products domestically and
internationally; the ability to successfully integrate companies we acquire,
difficulties or delays in manufacturing; or a downturn in the market or
industry. A further list and description of these risks, uncertainties and
other matters can be found in the Company's reports filed with the Securities
and Exchange Commission and the Canadian Securities Administrators.




For further information:

For further information: Mad Catz Interactive, Inc. Stewart Halpern,
800-831-1442 Chief Financial Officer or Jaffoni & Collins Incorporated Joseph
Jaffoni or David Jacoby, 212-835-8500 mcz@jcir.com

Organization Profile

MAD CATZ INTERACTIVE, INC.

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