The Rise and Fall of Embracer (aka THQ Nordic)

[commie]

Wake me up when they announce Freespace 3.....

 

[Harry Easter]

They have ambitions, you have to give them that.

 

[unfairlight]

Banzai, huh. Will be interesting to see if it will just stay a management and marketing arm or if they intend to actually start developing games from there at some point. Not the cheapest place to develop games from but Japan has had a relatively unknown AA game development scene for a while, although it was one that was a lot more console than PC focused and a bit less indie than what you saw in Europe. With how blind and dumb some Japanese companies have been they might just be able to buy out some companies and IPs should one fuck up badly enough. Or maybe we'll just get bad end and it will just start publishing mobile gacha games since the Japanese game industry is not that big and very occupied.

 

[LESS T_T]

THQ No... no, Embracer Group's financial presentation feels hollow without announcements of acquisitions: https://embracer.com/report/embrace...tional-ebit-increased-133-to-sek-241-million/

But recently acquired Goodbye Kansas Game Invest "founded a wholly owned new studio with a senior game development team departing from a large AAA developer."

And they're keep scouting:

And of course making even more games:

 

[HoboForEternity]

okay but where's ELEX 2

 

[LESS T_T]

I was expecting to hear they acquired Owlcat Games.

 

[Morgoth]

The moniker of THQ Shovelware would be more apt at this point.

 

[vortex]

What is Embracer Group?

 

[Ismaul]

Nothing but a bunch of

 

[Paul_cz]

Warhorse Secret Project
4A Games Secret Project

Are relevant to my interests.

 

[LESS T_T]

So THQ Nordic established a Barcelona studio that is focused on making RPGs... after they have acquired three RPG studios (Experiments 101 of Biomutant, Warhorse, PB) over last two years? They also have Grimlore Games.

Literally Lars Wingefors, the founder:



But pity it seems he's not that fond of turn-based games! Very few turn-based games they have published are either no budget production or publishing projects they don't own. (Well, I hope it fares well for Logic Artists.)

 

[LESS T_T]

Embraced another indie studio: https://embracer.com/release/embracer-group-acquires-critically-acclaimed-tarsier-studios/

EMBRACER GROUP ACQUIRES CRITICALLY ACCLAIMED TARSIER STUDIOS
2019-12-20 06:30


Embracer Group today acquired Tarsier Studios. The purchase price is SEK 88 million in cash and SEK 11 million in newly issued Embracer B-shares, plus a conditional earn-out, payable over 10-years to certain sellers who will remain with Tarsier. The acquisition includes the development studio, all employees and Intellectual Property rights.

Tarsier was founded 2005 in Karlshamn, has 15 years of experience from games development and is one of the largest independent studios in Sweden. Today the studio is based in Malmö, has 65 employees and is led by an experienced team with award-winning creative and artistic world class skills.

Tarsier focuses on developing AA(A)/III (Tripple-i) adventure games and platform puzzles to primarily PC and consol. Over the years, the company has worked primarily as a work-for-hire studio together with global publishing powerhouses such as Nintendo, Sony Interactive and Bandai Namco. The studio has also been successful in developing new original IPs such as Little Nightmares, Statik and Stretchers from concept, through the development phase and to commercial release. The Little Nightmares IP is owned by Bandai Namco, the Statik IP is owned by Tarsier and the Stretchers IP is owned by Nintendo.

Tarsier is most famous for the critically acclaimed million-selling franchise Little Nightmares (2017), where Tarsier developed the IP from scratch and released it together with Bandai Namco on PlayStation, XBOX ONE, PC and Nintendo Switch. At Gamescom in August 2019, they announced the sequel Little Nightmares 2, planned to be released during 2020 together with Bandai Namco.

Embracer has a firm confidence in the competence and knowledge that has been accumulated in Tarsier during its 15 years in the games business and is looking forward to supporting the Studio with long-term investments into new IP development. The Studio will remain autonomous within Embracer’s wholly owned sub-group Goodbye Kansas Game Invest. Embracer and Goodbye Kansas Game Invest will act as owner, financier and publisher of the new IPs to be developed. Tarsier and Embracer is committed to completing ongoing development projects financed by external parties such as Little Nightmares 2, published by Bandai Namco.

“We at Embracer are impressed with the position and the team that Tarsier has built up during 15 years, which is evident looking at the fantastic reviews that several of the studio’s famous productions have received, and with the future ambitions of the Studio. Together with Tarsier, we want to invest in developing new projects, in the same manner they have done successfully in the past. We look forward to, together with management and all of Tarsier’s employees, embrace the quality and creativity the Studio has, and take the Studio to the next level“, says Lars Wingefors, co-founder and group CEO, Embracer Group AB.

“It feels exciting to, after a 15-year long journey with Tarsier, partner up with Embracer to continue develop the potential that our Studio has. We look forward to the opportunity to continue making exceptionally great games together with Embracer Group“, says Andreas Johnsson, Studio Head, Tarsier Studios.

Background and rationale

Embracer Group has a clear growth strategy and a long and successful history of acquiring games and development studios. Through the acquisition of Tarsier Studios, Embracer builds on its strong presence in the Swedish market and establishes a platform in Malmö, a hub that promotes game development with various initiatives annually and with over 50 active gaming studios. Embracer will support Tarsier’s future growth and is convinced that the studio has an excellent ability to build on the portfolio and knowledge it has created during its 15 years in the industry, and can benefit from Embracer’s network and expertise in development and placement.

Financing of the transaction

The purchase price will be financed by Embracer’s existing cash and by issuing new B-shares in Embracer Group AB, in accordance with authorization from the AGM. The newly issued class B shares are issued to five of the sellers of Tarsier Studios. The price per share is based on the volume-weighted average price of Embracer Group’s shares on Nasdaq First North Growth Market during the twenty (20) trade days preceding 20 December 2019 (i.e. 19 December 2019), i.e. SEK 67.91. Following the issue of shares, the number of shares increase in total by 162,163 to 312,067,198 and the number of votes increase with 162,163 to 554,905,035 (divided between 27,000,000 A shares and 285,067,198 B shares). The share capital increases with in total approximately SEK 450 from approximately SEK 866,403 to approximately SEK 866,853. The newly issued shares will represent 0.05 percent and 0.03 percent of the total number of shares and votes in the Company, respectively, on a fully diluted basis.

In addition to the purchase price, certain sellers are entitled to a 10 year earn-out payment, subject to fulfilment of specific financial metrics, with a cap of SEK 44 million. The transaction is not subject to any further resolution or approval and the record date is December 20, 2019.

 

[LESS T_T]

But recently acquired Goodbye Kansas Game Invest "founded a wholly owned new studio with a senior game development team departing from a large AAA developer."

It's based in Sweden, many core devs worked at DICE: https://embracer.com/release/embrac...-new-game-development-studio-river-end-games/

They're working on an original title with "a deep narrative and exquisite visual design."

EMBRACER GROUP SUBSIDIARY AMPLIFIER GAME INVEST ESTABLISHES A NEW GAME DEVELOPMENT STUDIO: RIVER END GAMES

River End Games is a new game development studio based in Gothenburg, Sweden. Funded and supported by Embracer Group’s fully owned subsidiary Amplifier Game Invest, it comprises a hand-picked team of highly experienced game developers lead by Anders Hejdenberg and Karl Broström.

“At Amplifier Game Invest, we saw an opportunity to build an exceptional team and to found a new ambitious studio in Gothenburg, Sweden. We approached Anders Hejdenberg and Karl Broström and they were both thrilled at the opportunity,” says Per-Arne Lundberg, CEO of Amplifier Game Invest (until recently known as Goodbye Kansas Game Invest).

River End Games will have a team of six experienced developers from the start, with an average industry experience of 18 years. They are already well underway with the development of the studio´s first title, building on an original IP, with a deep narrative and exquisite visual design.

By setting up and fully owning a completely new studio, with full funding and the support from the successful global Embracer Group, Amplifier Game Invest establishes a new model that fills a gap in the market. The aim is to attract ambitious and experienced game development talents by giving them creative freedom to develop great games and grow. With the new model, the developers will get a financial incentive based on the performance of the released games, allowing them to focus entirely on the creative process.

River End Games is a fully owned subsidiary of Amplifier Game Invest AB, joining the ranks of several game development companies already part of the Amplifier family. Amplifier Game Invest is a subsidiary of Embracer Group.

 

[LESS T_T]

They found yet another studio under Amplifier Game Invest. Embracer Group's first studio based in America (but still led by Swedes): https://embracer.com/release/embrac...ishes-a-new-seattle-studio-c77-entertainment/

It will make big action games on an original IP. Job posting for Senior Engineer mentions networking and live service experiences.

EMBRACER GROUP SUBSIDIARY AMPLIFIER GAME INVEST EXPANDS TO NORTH AMERICA, ESTABLISHES A NEW SEATTLE STUDIO: C77 ENTERTAINMENT

The new game development studio, C77 Entertainment in Seattle, is the latest addition to the Amplifier Game Invest portfolio and an expansion onto the North American market for the company. The team will focus on big-action experiences for PC and console players.

“We found an opportunity to set up a new studio together with Mattias Kylén and Kenny Magnusson. Their unparallelled experience paired with their vision and passion made it really easy to push the start button”, says Per-Arne Lundberg, CEO of Amplifier Game Invest.

The creative vision of C77 Entertainment is set down by Mattias Kylén and Kenny Magnusson; two Swedes with a long history in the AAA-industry, having worked on several award-winning titles.

“The support provided by Amplifier Game Invest and the Embracer Group is not only financial but includes marketing, publishing, business operations, payroll, HR and legal. They have been fantastic in providing this infrastructure. For a highly creative group like C77 Entertainment, who are not traditional entrepreneurs, this is a dream come true”, says Mattias Kylén, CEO, C77 Entertainment.

The 6-person strong core team of C77 Entertainment have worked together before on blockbuster AAA-titles, and they are joining forces with Embracer Group and Amplifier Game Invest to deliver explosive games building on an original IP.

“Moving into the North American market not only increases our potential to attract the best teams available for acquisitions, but also expands this model where we found the company and give the developers solid financial incentives as employees. Exciting times ahead”, says Per-Arne Lundberg, CEO of Amplifier Game Invest AB.

C77 Entertainment will be a fully owned subsidiary to Amplifier Game Invest AB, joining the ranks of several Game Development companies already part of the Amplifier family.

 

[Perkel]

THQ Nordic feels like scam. They basically buy everything they can buy so that they can pump up their stock price and then run away with investor money when most of their games will not be profitable. As long as they grow fast this is great for investors but when they will hit cap then they will have to show receipts and i feel like they won't have anything to show other than big red numbers.

 

[DeepOcean]

THQ Nordic feels like scam. They basically buy everything they can buy so that they can pump up their stock price and then run away with investor money when most of their games will not be profitable. As long as they grow fast this is great for investors but when they will hit cap then they will have to show receipts and i feel like they won't have anything to show other than big red numbers.

Debt is really cheap on Europe right now because of the monetary policy of the ECB, banks pretty much pay you for taking a loan, you just need to have a few investors to get some aura of credibility and not look like a scammer and you can borrow as much as you want. Hey, it worked so far for Netflix, Uber, Tesla and other unicorns, to me is more credible that something like THQ eventually will make money than some pipe dream company like Tesla. Besides, they have a few strong IP like the Metro games (Metro Exodus apparently sold well) and are making a new Saints Row game, if they make it good, they will get flooded with cash. They may survive this expansionist phase and honestly I hope they do because fuck EA, and I want more competition on the gaming market. We need more publishers making AA games.

Investors are after exponential growth company that take this cheap credit to expand operations, that is why so many game companies have been abusing microtransactions, many shareholders are complaining about all this growth they see everywhere when the gaming industry isnt growing as fast as things like Uber, Netflix and other unicorns, so you will take microtransactions in the ass to keep shareholders happy and keep revenues growing not matter the cost.

While the stock market bubble remain strong and the ECB keeps burning money to keep it going, they have nothing to fear, if shit hits the fan, well it will be a very shitty time not only for them.

 

[LESS T_T]

Another new studio, under THQ Nordic, based in Slovakia. Not officially announced yet but there's a website and job postings.

Sometimes it looks like a better and bigger version of PlayWay S.A..

 

[LESS T_T]

Another new studio, under THQ Nordic, based in Slovakia. Not officially announced yet but there's a website and job postings.

Survival shooter things: https://embracer.com/release/embrac...udio-nine-rocks-games-in-bratislava-slovakia/

EMBRACER GROUP SUBSIDIARY THQ NORDIC SETS UP DEVELOPMENT STUDIO NINE ROCKS GAMES IN BRATISLAVA, SLOVAKIA

Embracer Group AB (publ) fully own subsidiary THQ Nordic GmbH today announced the incorporation of its new studio Nine Rocks Games in Bratislava, Slovakia. The team, including industry veteran CEO David Durcak, will be working on a game in the shooter- /survival genre. More information on the project will be released, by THQ Nordic GmbH, in due time.

Nine Rocks Games is a fully owned subsidiary of THQ Nordic GmbH.


About THQ Nordic GmbH

Founded in 2011, THQ Nordic is a global video game publisher and developer. Based in Vienna (Austria), and with subsidiaries in Germany, Sweden, Finland, and the USA, THQ Nordic brands include Darksiders, MX vs. ATV, Red Faction, Titan Quest, Biomutant, Wreckfest, Gothic, ELEX and many more.

For more information, please visit: https://thqnordic.com/

About Nine Rocks Games

Nine Rocks Games is a member of the THQ Nordic network of studios and was founded in January 2020 in Bratislava, Slovakia. The studio’s experience includes work on projects like DayZ (2018), Soldier of Fortune 3 (2007), Conan (2004), or Chaser (2003), to name a few. Its first project under the THQ Nordic umbrella will be in the survival/shooter genre.

For more information, please visit: https://ninerocksgames.com/

About Embracer Group

Embracer Group is the parent company of businesses developing and publishing PC and console games for the global games market.

The Group has an extensive catalogue of over 130 owned franchises, such as Saints Row, Goat Simulator, Dead Island, Darksiders, Metro, MX vs ATV, Kingdoms of Amalur, TimeSplitters, Satisfactory and Wreckfest amongst many others. With its head office based in Karlstad, Sweden, Embracer Group has a global presence through its three operative groups: Koch Media GmbH, THQ Nordic GmbH, and Coffee Stain AB. The group has nineteen internal game development studios and are engaging more than 3,000 employees and contracted employers in more than 40 countries.

 

[LESS T_T]

Embracer's another great embrace, Saber Interactive, American developer which has more than 600 employees: https://embracer.com/release/embrac...active-initial-consideration-usd-150-million/

EMBRACER GROUP ACQUIRES SABER INTERACTIVE – INITIAL CONSIDERATION USD 150 MILLION

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES, AUSTRALIA, CANADA, NEW ZEALAND, HONG KONG, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL OR WOULD REQUIRE REGISTRATION OR ANY OTHER MEASURES.

Embracer Group enters into an agreement to acquire the assets of US-based Saber Interactive. Saber Interactive is a leading game developer and publisher with more than 600 employees across six offices. During 2019 Saber Interactive realised approximately USD 105 million of revenues and USD 62 million of EBIT.1 The purchase price includes an initial consideration of USD 150 million, plus an earn-out consideration, subject to fulfilment of agreed milestones, of a maximum USD 375 million. Post closing, Saber Interactive will become Embracer Group’s fifth operating group and Saber Interactive’s co-founders and owners, Matthew Karch and Andrey Iones, will jointly become Embracer Group’s second largest shareholder.

"Saber has been on our radar for a very long time because of their deep history of consistently high-quality work. Their ambitious moves towards self-funding projects in recent years have been particularly impressive, especially with World War Z, which sold more than three million units. While Saber will remain a standalone company within Embracer Group, we look forward to collaborating with them to elevate their ability to create and market premier titles.”, says Lars Wingefors, Founder and CEO of Embracer Group.

"Over the course of 19 years as an independent developer, Saber has had its share of suitors. With Embracer Group, we’ve at last found the perfect partner. We could not be more thrilled to see through the many projects we’ve dreamed of together.” says Matthew Karch, Co-Founder and CEO of Saber Interactive.

Embracer Group AB (publ) (”Embracer Group” or the “Company”) has entered into an agreement to acquire the assets of Saber Interactive Inc. and related entities, including studios in Russia, Sweden, Belarus, Spain, and Portugal, and including the shares of certain related companies (jointly, “Saber Interactive”) (the "Transaction"). The sellers are the owners Andrey Iones and Matthew Karch as well as one corporation controlled by them (the “Sellers”). The purchase price amounts to USD 150 million on a cash and debt free basis in a combination of cash and newly issued A and B shares of Embracer Group at closing (the “Upfront payment”), and a potential earn-out payment of USD 375 million, assuming certain objectives and conditions being fulfilled, in a combination of cash and newly issued A and B shares of Embracer Group (the “Earn-out payment”). The total consideration, assuming full earn-out, thus amounts to USD 525 million.

Saber Interactive is an independent developer and publisher of top-quality video games for PC, consoles and mobile platforms, headquartered in Maplewood, New Jersey with close to 20 years in the industry and with 590 internal developers across its studios in Russia, Spain, Portugal, Belarus, and Sweden. For the period 1 January – 31 December 2019, Saber Interactive realised approximately USD 105 million of revenues and USD 62 million of EBIT.[1]

The Transaction in brief

· The Upfront payment for Saber Interactive amounts to USD 150 million, divided as follows:
· USD 100 million in cash; and
· 6,209,353 B shares of Embracer Group, equivalent of USD 50 million, of which USD 30 million, corresponding to 3,725,612 B shares, are subject to a one year lock-up.

· The Earn-out payment of USD 375 million consists of:
· USD 100 million cash paid two years post closing, which comes with an annual interest rate of approximately 1.6%; and
· USD 275 million paid in Embracer Group shares (together with the equity part of the Upfront payment, the “Consideration shares”), of which:
· 14,033,140 B shares of Embracer Group, equivalent of USD 113 million, issued at closing and vested 3 years after closing, conditional upon completion of certain projects
· 189,783 A shares and 13,719,168 B shares of Embracer Group, equivalent of USD 112 million, issued at closing and vested 6 years after closing, conditional upon completion of certain projects; and
· 6,209,354 A shares of Embracer Group, equivalent of USD 50 million issued at closing and vested 6 years after closing, conditional upon completion of certain projects, and the Sellers remaining employed by the Company 6 years post closing.

· The total consideration, assuming full earn-out, of USD 525 million is equivalent of approximately 8.4x Saber Interactive’s 2019 EBIT.[2]
· The Consideration shares are issued at a price of SEK 78.4510 per share which equals the 40 day volume weighted average price of Embracer B shares on Nasdaq First North Growth Market up to and including 18 February 2020, and using the FX rate USD/SEK of 9.7426 per 18 February 2020.[3]
· In addition, the Sellers will enter into agreements with Embracer Group which include a 20 year profit share of Saber Interactive’s business performance as part of Embracer Group. The profit share scheme incorporates 10% of Saber Interactive’s realised annual EBIT above USD 76 million, i.e. after 20 years the Sellers are entitled to receive a total amount equal to 10% of Saber Interactive’s accumulated EBIT that exceeds USD 1,520 million (20 years x USD 76 million).
· The Sellers will become the second largest shareholder block in Embracer Group after Lars Wingefors through companies[4] and Erik Stenberg through companies[5] with a joint holding of approximately 11% of the capital and 15% of the votes in Embracer Group, assuming full Earn-out payment and that all shares issued as part of the Earn-out payment have been vested.
· Closing of the Transaction is expected to take place during the second calendar quarter of 2020.
· To close the Transaction the board of directors of the Company has today resolved to summon an extra general meeting of the shareholders to authorize the board to issue the Consideration shares.
· Closing of the Transaction is conditional upon customary conditions including regulatory approvals such as merger control clearance.
· Following closing of the Transaction, the carved out part of the Saber Interactive business will continue to operate as a separate division within the Company. No restructuring or cost saving programmes are planned.
· Lars Wingefors and Erik Stenberg, together representing approximately 62% of the total votes in Embracer Group, have committed to vote in favour of the authorization to issue Consideration shares proposed for the extra general meeting. Lars Wingefors and Erik Stenberg have also committed to vote in favour of appointing Matthew Karch to Embracer Group's board of directors following closing of the Transaction.

The Transaction is in line with Embracer Group’s communicated strategy of identifying and acquiring franchises, game development studios, publishers or other objects that complement the Company’s operations.

Background and reasons

Embracer Group has a clear growth strategy and a long and successful history of acquiring game franchises and development studios.

On 19 February 2020, Embracer Group signed an agreement with the Sellers to acquire substantially all of the assets of Saber Interactive and related assets, including studios in Russia, Sweden, Belarus, Spain, and Portugal.

Saber Interactive is an independent developer and publisher of top-quality video games for PC, consoles and mobile platforms, headquartered in Maplewood, New Jersey. The company was founded by Matthew Karch, currently CEO, and Andrey Iones, currently COO, in 2001. Saber Interactive has extensive experience with projects starting from conception, design, pre-production and has c. 600 internal developers across its studios in St Petersburg in Russia, Madrid in Spain, Porto in Portugal, Minsk in Belarus, and Sundsvall in Sweden plus several external developers who are committed to working with Saber Interactive. Games developed include work-for-hire projects, self-funded as well as co-published proprietary titles. The group benefits from close to 20 years of experience in game development during which they have developed relationships with all major publishers, licensors, and retailers in the gaming industry. In addition, Saber Interactive has a strong publishing knowledge from its self-funded and co-published games, including WWZ. Other key titles developed by Saber Interactive include Mudrunner and NBA Playgrounds. Saber Interactive adds 4 announced and 8 unannounced development projects to Embracer Group’s portfolio.

For the current year, Saber Interactive expects a similar activity as for the period Jan-Dec 2019, driven primarily by game releases expected during the second half of the year. For the coming years, Saber Interactive sees increasing activity from current levels driven by a growing pipeline of future game development and publishing projects.

Spoiler

Key ratios as of today’s date

Embracer Group Saber Combined
Internal development studios 26 5 31
External development studios 58 3 61
Total development studios 84 8 92

Sales, marketing & publishing offices

Internal developers headcount 1,237 590 1,827
Internal non-development headcount 713 40 753
Total internal headcount 1,950 630 2,580
Total external developers headcount 1,021 150 1,171
Total headcount (internal + external) 2,970 780 3,750

Development pipeline
Announced 44 4 48
Unannounced 52 8 60
Total game development projects 96 12 108

Total number of IPs 154 9[6] 163

Financials for Saber Interactive

For the period 1 January – 31 December 2019, Saber Interactive realised approximately USD 105 million of revenues and USD 62 million of EBIT.[7] The increase in revenue from the USD 38 million generated during the same period 2018 is largely attributed to the shift to owned/licensed IPs and the success of WWZ. The increase in EBIT from USD 14 million generated during the same period 2018 is largely a result of the revenue increase. Saber Interactive does not capitalize its development cost and has a high cash conversion.

It should be explicitly noted that the abovementioned financials are prepared in accordance with management accounts and they are thus not prepared in accordance with the accounting principles applied by Embracer Group. The financials have neither been reviewed nor audited by Saber Interactive’s auditors.

The combination of the entities
The Transaction is in line with Embracer Group’s communicated strategy of identifying and acquiring franchises, game development studios, publishers or other objects that complement the Company’s operations. They key highlights for the Transaction include:

· Senior management with highly experienced and efficient development teams;
· Strong profitability with high cash conversion;
· Additional stable and recurring revenue stream from Work-for-hire / royalty based projects;
· Portfolio of recurring titles and a solid and growing pipeline from 2020 and onwards;
· Long term synergy opportunities within publishing, development and IP utilisation; and
· Platform for further organic growth and acquisitions.

The going-concern of Saber Interactive as part of the Embracer Group is supported by the commitment of the Sellers to remain employed within the Company for at least 6 years. In addition, the Sellers’ commitment to the combined entity is strengthened by them, combined, becoming the second largest shareholder block of the Company and their 20 year profit share scheme.

Illustrative combined financials for the period 1 January – 31 December 2019

The Company has prepared a statement of the combined group’s financial position as of 31 December 2019 which is presented below with the purpose of describing the new group’s financial position after the Transaction. The preliminary combined statement of financial position is prepared for illustrative purposes only and is solely intended to describe the hypothetical situation of the new group as if the Transaction had been completed as of 31 December 2019 based on Embracer Group’s and Saber Interactive’s respective financial positions as of 31 December 2019. Saber Interactive has thus far had USD as its reporting currency and the USD figures have been translated to SEK using the FX rate as of 31 December 2019, with USD/SEK at 9.3650[8]. The below financial statement has neither been reviewed nor audited by the Company's auditors.

Dec19, SEKm Embracer Group Saber Transaction Adjustments Combined
Intangible 5,633 - 4,714 10,347
assets
Property, 169 - - 169
plant and
equipment
Financial 201 - - 201
assets
Inventories 387 - - 387
Current 1,570 204 - 1,774
receivables
Cash and bank 2,785 483 -2,356 912
balance
Total assets 10,745 687 2,359 13,790
Equity 6,177 685 2,359 9,221
Provisions 1,306 - - 1,306
Non-current 209 - - 209
liabilities
Current 3,053 2 - 3,055
liabilities
Total equity 10,745 687 2,359 13,790
and
liabilities

The Company has also prepared a combined income statement of the new group for the period 1 January – 31 December 2019, with the purpose of describing a hypothetical income statement as if the Transaction had been completed as of 1 January 2019. No synergies have been considered in the combined income statement. It is important to note that the preliminary combined income statement is prepared for illustrative purposes only and should not be considered an estimate or forecast for the coming twelve months. Saber Interactive has thus far had USD as its reporting currency. The USD figures have been translated to SEK using the average FX rate for the period 1 January – 31 December 2019, with USD/SEK at 9.4582[9]. The below income statement has neither been reviewed nor audited by the Company's auditors.

January – Embracer Group Saber Transaction Adjustments Combined
December 2019,
SEKm
Revenue 5,541 981 - 6,522
Total operating 6,485 991 - 7,476
income
Total operating -6,065 -400 -943 -7,407
expenses
EBIT 421 591 -943 69
Amortization of 722 - 943 1,665
intangible
assets
Operational EBIT 1,143 591 - 1,734
Depreciation of 802 - - 802
PP&E
EBITDA 1,945 591 - 2,536
Impairment of - - - -
intangible
assets
EBIT margin 7.6% 60.2% n.a. 1.1%
Operational EBIT 20.6% 60.2% n.a. 26.6%
margin
EBITDA margin 35.1% 60.2% n.a. 38.9%

Embracer Group has not completed the detailed valuation analyses necessary to arrive at the final estimates of the fair market value of the assets to be acquired and the liabilities to be assumed in connection with the acquisition of Saber Interactive. The preliminary allocation of the purchase price of the acquisition (the “Preliminary PPA”) used in these illustrative combined financial statements is based upon Embracer Group’s preliminary estimates at the date of preparation of these financial figures. As a result of the finalisation of this allocation after the acquisition’s final completion (the “Final PPA”), Embracer Group expects to make adjustments to the Preliminary PPA, some of which could be material. Differences between the Preliminary PPA and the Final PPA could have a material impact on Embracer Group’s pro forma financial performance.

Purchase price

The Upfront payment for Saber Interactive amounts to USD 150 million, of which USD 100 million is being paid in cash and 6,209,353 B shares of Embracer Group equivalent to USD 50 million in, of which USD 30 million corresponding to 3,725,612 B shares are subject to a one year lock-up. The Earn-out payment of USD 375 million consists of USD 100 million paid in cash two years post closing, and which is subject to an annual interest rate of approximately 1.6%, and USD 275 million paid in newly issued Embracer Group shares. Of the USD 275 million, 14,033,140 B shares of Embracer Group, equivalent of USD 113 million, are issued at closing and vested 3 years after closing subject to 2 games being released during the first 3 years post closing, 189,783 A shares and 13,719,168 B shares of Embracer Group, equivalent of USD 112 million, are issued at closing and vested 6 years after closing subject to 1 additional game being released during the first 6 years post closing; and 6,209,354 A shares of Embracer Group, equivalent of USD 50 million issued at closing and vested 6 years after closing subject to 1 additional game being released during the first 6 years post-closing, and the Sellers remaining employed by the Company 6 years post closing. In total the Consideration shares amount to 40,360,798 shares of Embracer Group, whereof 6,399,137 are A shares and 33,961,661 are B shares.

Issue of the Consideration Shares

The Consideration shares are issued at a price of SEK 78.4510 per share which equals the 40 day volume weighted average price of Embracer B shares on Nasdaq First North Growth Market up to and including 18 February 2020.

The Consideration shares will be a combination of A and B shares and represent approximately 11% of the capital in the Company and approximately 15% of the votes in the Company on a fully diluted basis assuming full Earn-out payment and that all shares issued as part of the Earn-out payment have been vested.

By issuing the Consideration shares, the number of shares increases by 40,360,798 to 352,427,996 and the number of votes increases by 97,953,031 to 653,020,229 (divided among 33,399,137 A shares and 319,028,859 B shares). The share capital will increase by approximately SEK 112,113 to approximately SEK 978,966.

Lars Wingefors will have a right of first refusal applying to any A shares that may be sold or requested for conversion into B shares by the Sellers.

Resolution to issue the Consideration shares will be made by the board of directors of the Company in connection with completion of the Transaction with the support of the authorization proposed for the extra general meeting to be held on 11 March 2020.

Conditions for the completion of the Transaction

Closing of the Transaction is expected to take place during the second calendar quarter of 2020 after which Saber Interactive will be fully consolidated into Embracer Group.

Closing of the Transaction is conditional upon customary conditions including regulatory approvals such as merger control clearance.

Sellers’ employment package post closing

The Sellers will enter into employment and profit sharing contracts with Embracer Group which provides them with a fixed salary and a 20 year profit share scheme. The profit share scheme incorporates 10% of Saber Interactive’s realised annual EBIT above USD 76 million, i.e. after 20 years the Sellers are entitled to receive a total amount equal to 10% of Saber Interactive’s accumulated EBIT that exceeds USD 1,520 million (20 years x USD 76 million).

Extra general meeting and voting commitments

An extra general meeting is planned to be held on 11 March 2020 to resolve to authorize the board of directors to issue the Consideration Shares. For further information, please refer to the notice announced through a separate press release which will be published today, and be held available on Embracer Group's website, www.embracer.com.

Lars Wingefors and Erik Stenberg, together representing approximately 62% of the votes in Embracer Group, have committed to vote in favour of the authorization to issue Consideration shares proposed for the extra general meeting.

Following closing of the Transaction, Lars Wingefors and Erik Stenberg have also committed to vote in favour of appointing Matthew Karch to Embracer Group's Board of Directors.

Advisers

Carnegie Investment Bank AB (publ) and EY are acting as financial advisers and Baker McKenzie is acting as legal counsel to Embracer Group in the Transaction.

Alantra is acting as financial adviser, and ELRO Law and Comiter, Singer, Baseman & Braun are acting as legal advisors to the shareholders of Saber Interactive in the Transaction.

Responsible parties

This information is such information Embracer Group AB is obliged to make public in accordance with the (EU) Market Abuse Regulation. The information in this press release has been made public through the agency of the responsible person set out below for publication at the time stated by Embracer Group's news distributor Cision at the publication of this press release. The responsible person below may be contacted for further information

For additional information, please contact:

Lars Wingefors, Group CEO

Tel: +46 708 47 19 78

E-mail: lars.wingefors@embracer.com

About Embracer Group

Embracer Group is the parent company of businesses developing and publishing PC and console games for the global games market. The group has an extensive catalog of over 150 owned franchises, such as Saints Row, Goat Simulator, Dead Island, Darksiders, Metro, MX vs ATV, Kingdoms of Amalur, TimeSplitters, Satisfactory and Wreckfest amongst many others.

With its head office in Karlstad, Sweden, Embracer Group has a global presence through its four operative groups: Koch Media GmbH/Deep Silver, THQ Nordic GmbH, Coffee Stain AB and Amplifier Game Invest AB. The group has 26 internal game development studios engaging more than 3,000 employees and contracted employers in more than 40 countries.

Embracer Group's shares are publicly listed on Nasdaq First North Stockholm under the ticker EMBRAC B with FNCA Sweden AB as its Certified Adviser; info@fnca.se +46-8-528 00 399.

For more information, please visit: http://www.embracer.com

Forward-looking statements

This press release contains forward-looking statements that reflect the Company's intentions, beliefs, or current expectations about and targets for the Company's future results of operations, financial condition, liquidity, performance, prospects, anticipated growth, strategies and opportunities and the markets in which the Company operates. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "intend", "may", "plan", "estimate", "will", "should", "could", "aim" or "might", or, in each case, their negative, or similar expressions. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurances that they will materialize or prove to be correct. Because these statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward-looking statements as a result of many factors. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The Company does not guarantee that the assumptions underlying the forward-looking statements in this press release are free from errors and readers of this press release should not place undue reliance on the forward-looking statements in this press release. The information, opinions and forward-looking statements that are expressly or implicitly contained herein speak only as of its date and are subject to change without notice. Neither the Company nor anyone else undertake to review, update, confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this press release.

[1] Financials based on management accounts of actual figures for the period 1 January – 30 November 2019 and preliminary management accounts for the period 1-31 December 2019.

[2] From an accounting perspective, the final purchase price will be set post closing due to the share component and the accounting treatment thereof.

[3] Source: Riksbanken.

[4] Lars Wingefors AB and Lars Wingefors 2 AB.

[5] Xagonus AB.

[6] Excluding 5 licensed IPs of which 2 through partner.

[7] Unaudited financials based on management account actual figures for the period 1 January – 30 November 2019 and preliminary management accounts for the period 1-31 December 2019.

[8] Source: Bloomberg.

[9] Source: Bloomberg.

 

[LESS T_T]

Well even more. They founded two more studios under Amplifier Game Invest, Koch Media acquires French developer of some music games. From Q3 report: https://embracer.com/release/embrac...ational-ebit-increased-54-to-sek-302-million/

ACQUISITIONS AND NEW STUDIOS

In December, I was excited to welcome Tarsier Studios to the Group. I have a firm confidence in the competence and knowledge of this Malmö, Sweden-based studio with its 15 years in the games business. We are looking forward to supporting them with long-term investments into new IP-development. The acquisition was made by our wholly owned subsidiary Goodbye Kansas Game Invest, which was rebranded Amplifier Game Invest after the quarter.

Amplifier Game Invest, which we acquired in August, 2019, is becoming an increasingly important vehicle for our investments into new IP-development. Starting today, they will officially become our fourth operative group. During and after the quarter, they founded two new studios together with senior game developers. These ventures are based on a new partnership model designed to attract top talents with incentives and commercial support from the Group, while leaving them full creative integrity. The new studios are River End Games in Gothenburg, Sweden and C77 Entertainment in Seattle, USA. Based on the same blueprint, THQ Nordic established Nine Rocks Games in Bratislava, Slovakia. In addition, two more studios have been established within the Group since January 1, to be publicly announced in due course. Going forward, new studios will be communicated through our operating groups.

Amplifier Game Invest made a follow-on investment into the Stavanger, Norway-based fishing simulator developer Misc Games, bringing ownership to 55% of the studio.

Finally, this morning, Koch Media entered into an agreement to acquire Voxler, the French development studio behind the “Let’s Sing” series and other titles in the music games genre. Voxler has collaborated with Koch Media as an external development studio over the last 10 years. The purchase price for 100% of the shares was approximately EUR 1.9 million.

This brings the total number of wholly or majority owned development studios in the Group to 26 at the time of writing, compared to 10 one year ago and 20 at the end of the reporting period. At the end of 2019, the Group employed 2,258 internal and external game developers, which is a 52% increase compared to the corresponding quarter a year ago.

 

[LESS T_T]

The birdman says:

 

[fantadomat]

THQ are one of the few publisher that deliver good games from time to time,maybe even the best out of the big ones.

 

[LESS T_T]

https://www.gamesindustry.biz/artic...-raises-usd160m-for-acquisition-and-expansion

Embracer Group raises $164m for acquisition and expansion
THQ Nordic parent company also issues COVID-19 business impact assessment

Embracer Group has raised SEK 1.64 billion ($164 million) through a directed share issue for investment and acquisitions.

Over 100 global companies invested in the THQ Nordic parent company, which last year raised SEK 2 billion ($225 million) for similar expansion efforts.

The investment will be used to make further acquisitions of developers, publishers and other assets, in-line with the Embracer's recent acquisitions such as the $525 million deal for Saber Interactive in February this year.

Embracer also issued a statement regarding the ongoing coronavirus lockdown, and is "working hard on adapting operations to the current situation."

So far, the pandemic is having a "limited" impact on the group's business, which has seen increased engagement and demand in recent weeks.

All studios and publishers are up and running, with the majority of of employees working from; the transition caused "only a minor loss in production"

Things are less stable on the physical distribution side, however, as physical retailers close their doors for the immediate future.

"The COVID-19 crisis challenges us all," said co-founder and CEO Lars Wingefore in a management update. "I am truly impressed and thankful to all our hard working employees around the world, committed to keeping our business going in these challenging times.

"The health of our employees is very important to me and it is my number one priority. Whilst the economic turmoil will affect all businesses including ours, the games industry is in a solid state due to the fact that our products and services entertain people at home. I want you to know the group stands on a solid financial position with a healthy cash position."

 

[Perkel]

I wonder when this tower will fall over. They have been scooping up every single dev of mediacore renown with barely any profitable game out there and everything is mostly investement much like Amazon. The thing is that after a while people will want to capitalize on their investements and i can't see them having bilion from those studios in sales.

 

[hivemind]

is that after a while people will want to capitalize on their investements and i can't see them having bilion from those studios in sales.

you dont get roi through making profits
all u need is stocks go up