Console Club

[paul]

Embracer Group AB ("Embracer"), has today entered into a merger agreement with US based The Gearbox Entertainment Company ("Gearbox"). Gearbox, based in Frisco, TX and founded in 1999, has been self-funded by the employees from inception. Post-closing, Gearbox will become a seventh operating group as a wholly own subsidiary of Embracer. Gearbox Founder and CEO Randy Pitchford will continue to lead Gearbox, and Randy Pitchford and the employees of Gearbox will jointly become a significant shareholder in Embracer. Gearbox brings highly creative AAA development studios, North American publishing capabilities and a robust IP portfolio, including critically acclaimed and iconic franchises like Borderlands, Brothers in Arms and Homeworld. On a preliminary basis, based on Embracer’s accounting principles, Gearbox generated net sales of SEK 1,037 million and Adjusted Operational EBIT[1] of SEK 417 million during the nine month period from January 1 until September 30, 2020. In calendar year 2019, Gearbox generated net sales of SEK 1,052 million and Adjusted Operational EBIT of SEK 317 million.

The day one purchase price amounts to USD 363 million in total, on a cash and debt free basis, of which USD 175 million is paid in newly issued Embracer B shares (the “Closing Consideration Shares”) and the residual in cash. Subject to fulfilment of agreed financial and operational targets in the next six years, an additional consideration of maximum USD 1,015 million may be paid, of which a maximum of USD 360 million in issued Embracer B shares (the “Additional Consideration Shares”) and the residual in cash. To earn the maximum consideration, USD 1,378 million the accumulated Adjusted EBITDA, including expensed development costs, must exceed USD 1,300 million over six years.

“Gearbox is arguably one of the most creative and valuable independent developers in the world. We believe that the resources offered by Embracer will position Gearbox for continued significant growth in the years to come” says Lars Wingefors, Founder and Group CEO of Embracer Group

“Lars’s vision of Embracer as an allied partner group committed to fueling and accelerating the ambitions of a series of decentralized, successful entrepreneurial member companies while magnifying the collective value and advantages of diversification across the entire group is the most brilliant strategy and design for short, medium, and long-term success in this industry that I have worked in during 30 years. The feeling at Gearbox is that we are just getting started and this transaction is not merely a stimulant for the talent of our employee-owned company, but a propellent for the exciting future we have planned.” said Randy Pitchford, founder of The Gearbox Entertainment Company.

Embracer Group merges with The Gearbox Entertainment Company and form a seventh operating group - Embracer

Embracer Group AB ("Embracer") through its wholly owned subsidiary Saber Interactive ("Saber"), has today entered into an agreement to acquire US-based Aspyr Media Inc ("Aspyr") by merger from the founders Michael Rogers and Ted Staloch. The day one purchase price amounts to USD 100 million on a cash and debt free basis, where USD 60 million is paid in cash and USD 40 million is paid in newly issued Embracer B shares. An additional consideration of a maximum of USD 350 million may be paid under the agreement subject to certain conditions. Aspyr will be a stand-alone entity under Saber Interactive. Aspyr is an independent developer and publisher with more than 24 years’ experience in finding beloved IPs and connecting them with new audiences on all platforms. Through the acquisition, Embracer Group onboards a team of 140 seasoned developers lead by the founders. During the period January – December 2020, Aspyr generated approximately USD 40.6 million of revenues and USD 11.4 million of Operational EBIT[1].

An additional agreement tied to future employment and financial performance has been formed to align interests going forward.
“I have been a fan of Aspyr for longer than I have been in the industry. Michael and Ted are true entrepreneurs that have built a business by identifying and exploiting opportunity where no one else saw it. They are a perfect fit for Embracer and I am proud to now call them partners. Together we will be able to greatly expand our development and publishing activities here in the US. Stay tuned for details on some of the amazing games we have under joint development. Today is a truly amazing day for Saber and the entire Group” says Matthew Karch, CEO Saber Interactive and Director of the Embracer Board.

Embracer Group acquires Aspyr Media - Embracer