Activision Publishing Inc. on Monday said it had acquired one of its partners, video game developer Budcat Creations, for an undisclosed amount.

The division of Santa Monica-based Activision Blizzard Inc. said it had worked with Budcat Creations on the development of multiple games in the Guitar Hero franchise including Guitar Hero III: Legends of Rock. Budcat has expertise on the Wii home video game system and the Nintendo DS.

Privately held Budcat becomes a wholly owned subsidiary of Activision Publishing and its management team has signed multi-year employment contracts to stay on. The studio will continue to be based in Iowa City, Iowa.

“In addition to strengthening our development capabilities on the Nintendo platforms, this acquisition increases our Guitar Hero development resources as we continue to grow the franchise,” said Activision Publishing Chief Executive Mike Griffith in a statement.

Activision Blizzard last week reported higher-than-expected sales and an expected third-quarter loss in its first full quarter since its July merger with the video game unit of conglomerate Vivendi SA.

Activision shares were up 12 cents, or 1 percent, to $12.38 in morning trading on the Nasdaq.