Shares of Take-Two Interactive Software ( TTWO) took off Wednesday after the video game maker beat third-quarter estimates, raised guidance for the rest of the year and announced the acquisition of family-friendly gamemaker TDK Mediactive ( TDKM).

Shares of Take-Two gained a hefty $6.25, or 21%, to reach $36, a new all-time high, in recent trading. Shares of TDK climbed 14 cents, or 33.8%, to 54 cents in recent trading.

New York-based Take-Two, maker of the wildly popular Grand Theft Auto franchise, reported third-quarter net income of $7.7 million, a 60% increase from $4.8 million in the year-ago period. On a per-share basis, net income rose 50% to 18 cents from 12 cents a year ago. Analysts polled by Thomson First Call were expecting earnings of 17 cents a share.

Sales for the third-quarter ending July 31 climbed 27% to $155.6 million, higher than the consensus estimate of $144.8 million.

Take-Two said it will purchase TDK Mediactive for about $22.7 million. Take-Two will pay 55 cents a share to TDK Mediactive stockholders, representing a 37.5% premium over Tuesday's close of 40 cents. Take-Two also will purchase $9.9 million in debt and pay $200,000 to retire outstanding stock options for TDK. TDK reported a net loss of $8.3 million, or 36 cents a share, on $42.2 million in revenue in the fiscal year ended March 31.

TDK brings such family-friendly names as Shrek, Pirates of the Caribbean and The Muppets to Take-Two, which has been criticized as a one-hit wonder with its bloody but successful Grand Theft Auto. Take-Two and TDK Mediactive also have entered into a separate agreement providing Take-Two with exclusive North American distribution rights for TDK titles including The Haunted Mansion, scheduled for a mid-October launch in advance of the Thanksgiving release of the Disney feature film.

"I think what the TDK acquisition really shows is Take-Two is maturing from a hits-driven company to a company with a broader product line," said Joe Spiegel, an analyst with New York-based hedge fund Spinner Asset Management, which owns shares of TDK.

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