Embracer Group Unveils $460 Million Deal, Offloads Gearbox to Take-Two

Embracer Group sells Gearbox Entertainment to Take-Two Interactive for $460 million, improving its financial position and focusing on core growth areas.

Strategic move to reshape business
Strengthened financial position
Reduced net debt and improved free cash flow

In a strategic move to reshape its business and strengthen its financial position, Embracer Group has announced the divestment of Gearbox Entertainment. The deal, valued at a whopping USD 460 million (SEK 4.9 billion), will see Gearbox Entertainment being acquired by Take-Two Interactive Software, Inc.

The agreement comes as a significant step for Embracer Group, as it aims to reduce net debt, earnout obligations, and capital expenditures. The company will retain selected entities, including Gearbox Publishing SAN Francisco, which will be rebranded. These retained companies will continue to hold publishing rights to popular franchises like Remnant, as well as upcoming titles such as Hyper Light Breaker and other exciting unannounced projects.

Lars Wingefors, co-founder and CEO of Embracer, expressed his optimism about the deal, stating, “Yesterday’s announcement marks the result of the final structured divestment process and is an important step in transforming Embracer into the future with notably lower net debt and improved free cash flow. Through the transaction, we lower business risk and improve profitability as we transition to becoming a leaner and more focused company.”

Wingefors also commended Gearbox Entertainment for their contributions over the years, saying, “After evaluating several options for Gearbox, I am happy that we have reached a solution that is in the best interest of all stakeholders. Randy and the team have been great team members throughout the past years, and I would like to thank them all for that. As one of the world’s greatest game developers, I am confident that Gearbox will continue to innovate and thrive in their new home within Take-Two.”

Randy Pitchford, founder and CEO of Gearbox Entertainment, echoed Wingefors’ sentiments and reassured fans about the future of their beloved games. “As a significant long-term Embracer Group shareholder, I believe in the strategy for the Embracer Group going forward and am completely convinced that this transaction is the best possible scenario and an obvious net positive arrangement for Embracer Group, for Take-Two, and, of course, for Gearbox Entertainment. My primary interest is always Gearbox, especially our talent and our customers. I want to personally assure fans of our games that this arrangement will ensure that the experiences we have in development at Gearbox will be the best they can possibly be.”

While specific financial details of the transaction were not disclosed, the move is expected to have a significant impact on Embracer Group’s financials. The deal will substantially reduce net debt, earnout obligations, and capital expenditures, providing the company with improved free cash flow and a more secure financial footing.

Overall, this divestment marks a strategic decision by Embracer Group to streamline its operations and focus on core areas of growth. With Gearbox Entertainment finding a new home within Take-Two, both companies are poised to embark on exciting new ventures while ensuring a seamless transition for fans and stakeholders alike.

Embracer Group introduces $460 Million Deal, Offloads Gearbox to Take-Two

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