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Embracer announced sale of Gearbox to Take Two for $460m

Josh5890

Josh5890

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embracer.com

Embracer Group divests Gearbox Entertainment for a consideration of USD 460 million to Take-Two Interactive Software, Inc. - Embracer Group

INSIDE INFORMATION: Embracer Group has today entered into an agreement to divest Gearbox Entertainment, for a consideration of USD 460 million (SEK 4.9 billion) to Take-Two Interactive Software, Inc. (“Take-Two”). The proceeds from the deal will, upon closing, significantly reduce net debt...
embracer.com embracer.com


Embracer Group has today entered into an agreement to divest Gearbox Entertainment, for a consideration of USD 460 million (SEK 4.9 billion) to Take-Two Interactive Software, Inc. (“Take-Two”). The proceeds from the deal will, upon closing, significantly reduce net debt, earnout obligations and capex. Embracer retains selected companies, including Gearbox Publishing San Francisco (to be renamed), with the publishing rights to the Remnant franchise, the upcoming Hyper Light Breaker and other notable unannounced game releases.
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Transaction key components

  • The purchase price on a cash and debt free basis and assuming a normalized level of working capital amounts to USD 460 million (SEK 4.9 billion) and will be subject to adjustments by customary purchase price mechanics.
  • The consideration at closing will be paid 100% in newly issued Take-Two shares. The number of Take-Two shares will be calculated by dividing the purchase price by the volume weighted average closing price per share on the Nasdaq Global Select Market during the five trading day period ending on the trading day immediately prior to the closing date. Embracer’s intent is to sell these shares to receive cash proceeds soon after closing. Closing is expected in Q1 FY 24/25, ending June 2024.
  • Following purchase price adjustments, transaction costs, share sell-down and earnout settlements (including earnouts earned and due to be previously paid in Q1 FY 24/25) the expected net cash proceeds amount to approximately USD 300-330 million (SEK 3.2-3.5 billion).
  • Cash earnouts in accordance with non-GAAP will be reduced by SEK 1.6 billion compared to the group total of SEK 6.3 billion as of Q3 FY 2023/24 and of a total maximum of approximately 30 million B shares in share earnout obligations approximately 18 million B shares will be reduced. In connection with closing, the remaining approximately 12 million B shares will still be issued as settlement of certain earnout obligations.
  • The divested assets include:
    • Gearbox Software (Frisco, Texas)
    • Gearbox Montréal
    • Gearbox Studio Quebec
    • Borderlands and Tiny Tina’s Wonderlands franchises, as well as Homeworld, Risk of Rain, Brothers in Arms and Duke Nukem
  • The retained assets include:
    • Gearbox Publishing San Francisco (to be renamed prior to closing, formerly named Perfect World Entertainment), including the publishing rights to the Remnant franchise, the upcoming Hyper Light Breaker and other notable unannounced game releases
    • Cryptic Studios, including MMO titles Neverwinter Online and Star Trek Online.
    • Lost Boys Interactive
    • Captured Dimensions
  • The retained companies will be welcomed and integrated into other parts of Embracer Group in the coming period. All companies are expected to contribute with a positive cash flow going forward.
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Embracer's purchase of Gearbox was the first big sign of them going overboard with acquisitions so seeing them sell them for less than half the price of their purchase isn't too surprising. Curious that they are keeping Lost Boys Interactive when their big projects have been assisting on WWE 2K and Tiny Tina's Wonderlands.
 
Astrogamer said:
Embracer's purchase of Gearbox was the first big sign of them going overboard with acquisitions so seeing them sell them for less than half the price of their purchase isn't too surprising
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For this Point , I think I read that Embracer paid only $363M during the purchase , and the remaining ~$1B was tied to targets over 6 years , not sure how much they paid in those ~3 years
 
Low-key socked Embracer didn't take the PR hit by firing people first before this. Why would Take Two take the PR hit when they fire a bunch of people in the next month
 
The split in Gearbox Publishing shows what a mess Embracer had become, organization-wise. There's Gearbox Publishing and there's Gearbox Publishing San Francisco, formerly Perfect World Entertainment, both publishing under the same name. Now they are being split. What was the point of this extreme redundancy?
Astrogamer said:
Embracer's purchase of Gearbox was the first big sign of them going overboard with acquisitions so seeing them sell them for less than half the price of their purchase isn't too surprising. Curious that they are keeping Lost Boys Interactive when their big projects have been assisting on WWE 2K and Tiny Tina's Wonderlands.
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Various Embracer studios have done a lot of contract work, including Gearbox and the recently sold Saber. It's a method to have done guaranteed income without having the risk of self-publishing. Of course, Embracer also has a lot of publishers (as demonstrated above), but that just showcases the mess they're in.
 
Happy about it, because Embracer was simlpy unsustainable
as I said in the Relic-SEGA topic, happy also about the fact that, among all these layoffs, some studios has been able to become indipendent: a tought path, but at least they can try to survive doing their job
 
embracer.com

Embracer Group divests Gearbox Entertainment for a consideration of USD 460 million to Take-Two Interactive Software, Inc. - Embracer Group

INSIDE INFORMATION: Embracer Group has today entered into an agreement to divest Gearbox Entertainment, for a consideration of USD 460 million (SEK 4.9 billion) to Take-Two Interactive Software, Inc. (“Take-Two”). The proceeds from the deal will, upon closing, significantly reduce net debt...
embracer.com embracer.com
Embracer Group has today entered into an agreement to divest Gearbox Entertainment, for a consideration of USD 460 million (SEK 4.9 billion) to Take-Two Interactive Software, Inc. (“Take-Two”). The proceeds from the deal will, upon closing, significantly reduce net debt, earnout obligations and capex. Embracer retains selected companies, including Gearbox Publishing San Francisco (to be renamed), with the publishing rights to the Remnant franchise, the upcoming Hyper Light Breaker and other notable unannounced game releases.
Click to expand...
On one hand it is good to get away from Embracer but on the other it is Gearbox so we’ll have to see what they do.
 
Refyref said:
The split in Gearbox Publishing shows what a mess Embracer had become, organization-wise. There's Gearbox Publishing and there's Gearbox Publishing San Francisco, formerly Perfect World Entertainment, both publishing under the same name. Now they are being split. What was the point of this extreme redundancy?

Various Embracer studios have done a lot of contract work, including Gearbox and the recently sold Saber. It's a method to have done guaranteed income without having the risk of self-publishing. Of course, Embracer also has a lot of publishers (as demonstrated above), but that just showcases the mess they're in.
Click to expand...
There wasn't any point to it. In fact, I was one of many people that saw this redundancy and went "hold on a second". Any worry that they were going to become this gaming behemoth with all these acquisitions was kidding themselves, they were just the worst kind of holdings company.
 
Sony, Microsoft, Embracer, China and Saudi Arabia running around promising stability with big wads of cash but things are even more chaotic.

Thank God for Steam and hopefully Nintendo can follow up Switch with a platform businesses can build a future on.
 
MysticGon said:
Sony, Microsoft, Embracer, China and Saudi Arabia running around promising stability with big wads of cash but things are even more chaotic.

Thank God for Steam and hopefully Nintendo can follow up Switch with a platform businesses can build a future on.
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Tbh, we've seen Microsoft is willing to make deals that preserve the jobs of their employees as seen with DoubleFine and Toys For Bob, I think it's more a matter of most studio heads not thinking about the wellbeeing of developers upon selling their company, it's crazy to me that Insomniac would allow their employees to be laid off after carrying the PS5 generation.
 
Someone should make a new thread about this, but Embracer has now split into 3 different entities:
embracer.com

Embracer Group announces its intention to transform into three standalone publicly listed entities at Nasdaq Stockholm - Embracer Group

INSIDE INFORMATION: The Board of Directors of Embracer Group AB (“Embracer Group”) today announces a transformative step for value creation through a separation of the group into three market-leading games and entertainment companies: Asmodee Group, “Coffee Stain & Friends”[1] and “Middle-earth...
embracer.com embracer.com

The Board of Directors of Embracer Group AB ("Embracer Group") today announces a transformative step for value creation through a separation of the group into three market-leading games and entertainment companies: Asmodee Group, "Coffee Stain & Friends"[1] and "Middle-earth Enterprises & Friends"[1]. The three entities will be separate, publicly listed companies, enabling each entity to better focus on their respective core strategies and offer more differentiated and distinct equity stories for existing and new shareholders.
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