News & Media

Embracer Group acquires Appeal Studios, KAIKO, Massive Miniteam and FRAME BREAK

Embracer Group AB (“Embracer”) through its subsidiaries THQ Nordic GmbH and Amplifier Game Invest AB have entered into four acquisition agreements to acquire 100% each of Appeal Studios S.A., KAIKO GmbH, Massive Miniteam GmbH and FRAME BREAK AB. In addition, THQ Nordic is today also announcing that it has founded Gate 21 in Bosnia and Herzegovina. The aggregated day one purchase price for all four acquisitions amounts to approximately SEK 71 million on a cash and debt free basis.

Embracer Group completes the acquisitions of Aspyr, Easybrain and Gearbox Entertainment

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, NEW ZEALAND, SINGAPORE, 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.

On February 3, 2021 Embracer Group AB (the "Company" or “Embracer Group”) and its subsidiaries entered into agreements regarding the acquisition of Aspyr, Easybrain and Gearbox Entertainment, which was announced through press releases on February 3, 2021 (the "Transactions"). The aggregated day one purchase price for the Transactions amounts to approximately SEK 9.3 billion in total, on a cash and debt free basis. Approximately SEK 2.5 billion is paid in cash and approximately SEK 6.8 billion is paid in newly issued B shares of the Company. A maximum additional consideration amounting to SEK 12.5 billion on an aggregated basis can be paid, subject to fulfilment of agreed financial and operational milestones, during a period of up to 7 years. The additional consideration comprises a maximum of approximately SEK 7.0 billion to be paid in cash and approximately SEK 5.5 billion to be paid in B shares of the Company. The price per share issued as day one purchase price and additional consideration corresponds to the volume weighted average price per Embracer B share at Nasdaq First North Growth Market during 20 trading days preceding (but not including) the date of the signing of the agreements for the Transactions, i.e., SEK 197.57 (“VWAP 20”).

All conditions for the Transactions have now been fulfilled and the Transactions are consequently completed.

Embracer Group successfully completed a directed issue of 36,000,000 new B shares raising proceeds of roughly SEK 7.6 billion (approximately USD 890 million)

Embracer Group announces intention to carry out a directed share issue of B shares

Announcement from Embracer Group’s extra general meeting

The extra general meeting of Embracer Group AB ("Embracer" or the "Company") was held today on 26 February 2021 in Stockholm and the following resolutions were passed by the meeting.

Embracer Group publishes Interim Report Q3, October-December 2020: OPERATIONAL EBIT INCREASED 100% TO SEK 603 MILLION

THIRD QUARTER, OCTOBER–DECEMBER 2020 (COMPARED TO OCTOBER–DECEMBER 2019)

> Net sales increased by 44% to SEK 2,168.1 million (1,508.5). Net sales of the Games business area increased by 62% to SEK 1,355.6 million (835.7). THQ Nordic SEK 379.8 million (333.0), Deep Silver SEK 496.9 million (466.6), Coffee Stain SEK 99.2 million (36.1), Saber Interactive SEK 307.0 million (-) and DECA Games SEK 72.7 million (-).

> Net sales of Partner Publishing/Film business area increased by 21% to SEK 812.5 million (672.9).

> EBITDA increased by 70% to SEK 878.7 million (518.4), corresponding to an EBITDA margin of 41%.

> Operational EBIT increased by 100% to SEK 603.1 million (302.1) corresponding to an Operational EBIT margin of 28% (20%).

> Cash flow from operating activities amounted to SEK 840.4 million (239.5). Investments in intangible assets amounted to SEK –557.7 million (–419.0). Free Cash Flow amounted to SEK 309.1 million (–207.3).

> Adjusted earnings per share was SEK 1.06 (0.68).

> Organic growth in constant currency for the Games Business Area amounted to 21% in the quarter.

> Total game development projects increased 56% to 150 (96). Total headcount increased 93% to 5,730 (2,970) where total game developers increased 92% to 4,325 (2,258).

Invitation to presentation of Embracer Group’s Q3 report

Embracer Group hereby invites you to a presentation in connection with the publishing of the interim report for the third quarter for the fiscal year 2020/2021, the period October-December 2020. The Q3 report will be published at 06.00 (CET) on February 18th and available as of this time at www.embracer.com.

Notice of Extra General Meeting in Embracer Group AB

The shareholders of Embracer Group AB, reg. no. 556582-6558, (the "Company") are hereby invited to the extra general meeting on Friday 26 February 2021 at 10.00 CET at Baker McKenzie's premises at Vasagatan 7 in Stockholm.

ESTIMATED SEK 3,600-4,600 MILLION IN NET SALES AND SEK 1,000-1,500 MILLION IN OPERATIONAL EBIT ADDED DURING FY2021/22

INSIDE INFORMATION

Embracer Group (“Embracer”) and its subsidiaries have as previously communicated this morning entered into three transformative merger and acquisition agreements (the “Transactions”). After completion of the Transactions , Gearbox and Easybrain will create the seventh and eighth operating group within Embracer, respectively, and Aspyr will become the largest independent company to join the operating group Saber Interactive. The merged and acquired businesses are, during the financial year ending March 31, 2022, expected to contribute to Embracer’s net sales in the range of SEK 3 600-4 600 million and contribute to operational EBIT in the range of SEK 1 000-1 500 million.

Invitation to Embracer Group’s presentation about the merge with Easybrain at 09:00 (CET)

Embracer Group hereby invites you to a presentation on the occasion of this morning's press release head-lined "Embracer Group to merge with Easybrain forming eighth operating group".

Invitation to Embracer Group’s presentation about the acquisition of Aspyr Media at 12:00 (CET)

Embracer Group hereby invites you to a presentation on the occasion of this morning's press release head-lined "Embracer Group acquires Aspyr Media".

Invitation to Embracer Group’s presentation about the merge with The Gearbox Entertainment Company at 13:30 (CET)

Embracer Group hereby invites you to a presentation on the occasion of this morning's press release head-lined “Embracer Group merges with The Gearbox Entertainment Company and form a seventh operating group”.

Embracer Group to merge with Easybrain forming eighth operating group

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INSIDE INFORMATION

Embracer Group AB ("Embracer")[1], has today entered into an agreement to merge with Cyprus-based Easybrain Limited ("Easybrain") in an all equity transaction for a day one purchase price amounting to USD 640 million on a cash and debt free basis plus a maximum of USD 125 million in additional consideration. The sellers, Easybrain’s senior management, Peter Skoromnyi, Matvey Timoshenko and Oleg Grushevich, will post-closing, jointly become the third largest shareholder in Embracer. Easybrain will become Embracer’s eighth operative group as a wholly owned subsidiary and continue to be led by its existing management. Under IFRS based accounting principles, Easybrain estimates calendar year 2020 revenues of USD 210 million (2019: USD 111 million) and an EBIT of approximately USD 70 million (2019: USD 18 million).

Embracer Group acquires Aspyr Media

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].

The transactions in brief:

• 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 USD 25 million may be paid conditioned on management releasing certain commercial products prior to 31 March 2026.
• Subject to fulfilment of pre-agreed financial thresholds, an additional consideration may be paid annually to the sellers, up to an aggregate maximum of USD 325 million during a seven-year period (i.e. 31 March 2022 – 31 March 2028).
• An additional agreement tied to future employment and financial performance has been formed to align interests going forward.

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

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.

INSIDE INFORMATION

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.

Embracer Group’s subsidiary Koch Media has entered into an agreement of conciliation with the European Commission

Koch Media, a wholly owned subsidiary of Embracer Group AB (publ), has today entered into an agreement¹ of conciliation with the European Commission concerning the geo-blocking case, stated in the press release published by THQ Nordic AB (today Embracer Group AB) 2019-04-05. Koch Media’s settlement costs are fully covered within the original provision.

Embracer Group secures a new credit facility for M&A of SEK 3,0 billion

Embracer Group AB ("Embracer") has signed a new credit facility of SEK 3,0 billion on favorable terms with Nordea Bank with expiry in May 2022. With the new credit facility, total cash at hand and available credit facilities amount to more than SEK 11.5 billion SEK.

Embracer Group’s co-founders complete consolidation of shareholdings

The original co-founders of Embracer Group AB ("Embracer") has notified Embracer that the restructuring, announced in connection with the private placement carried out on 7 and 8 October 2020, has been completed. Through the restructuring, the original co-founders have consolidated their shareholdings in Embracer into Lars Wingefors AB. Following the completion of the restructuring Lars Wingefors AB holds 130,836,066 shares in Embracer, divided on 26,130,102 A shares and 104,705,964 B shares, corresponding to approximately 31 percent of the shares and approximately 51 percent of the votes in Embracer.

Estimated net sales of SEK 850-1,050 million and SEK 300-400 million in operational EBIT added during FY 2021/2022

INSIDE INFORMATION: Embracer Group AB (“Embracer”) and its subsidiaries have as previously communicated this morning entered into 13 acquisition agreements (the “Acquisitions”). The acquired businesses are, during the financial year ending 31 March 2022, expected to contribute to Embracer Group’s net sales in the range of SEK 850-1,050 million and contribute to operational EBIT in the range of SEK 300-400 million. In addition, during FY 2021/2022 the expanded studio footprint is expected to bring savings on capitalized game development in the range of SEK 50-100 million. The combined operational EBIT and savings on game development are expected to be in the range of SEK 350-500 million and this profitability is expected to grow in the following years as more game development projects will be completed.

The aggregated day one purchase price for the Acquisitions amounts to approximately SEK 2.0 billion on a cash and debt free basis. Approximately SEK 1.7 billion is paid in cash and SEK 0.3 billion in newly issued Embracer B shares with a maximum additional consideration amounting to SEK 1.8 billion, which is subject to fulfilment of agreed milestones, both operational and financial, over a period of up to 10 years. The additional consideration comprise a maximum of approximately SEK 0.9 billion which may be paid in cash and a maximum approximately SEK 0.9 billion to be paid in Embracer B shares at a price corresponding to the volume weighted average price per Embracer B share at Nasdaq First North Growth Market during 20 trading days up until and including the date of signing of the Acquisitions (VWAP 20). The aggregated maximum consideration amounts to SEK 3.8 billion.

Embracer Group acquires Flying Wild Hog

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Embracer Group AB ("Embracer"), through its wholly owned subsidiary Koch Media GmbH, has today entered into an agreement to acquire 100 percent of the shares in the Poland-based Flying Wild Hog ("FWH") from Supernova Capital LLP. Flying Wild Hog is a renowned and growing independent Polish developer of AA+ PC and console games such as the critically acclaimed Shadow Warrior series. The FWH team is currently working on four projects together with well reputable external publishers. Through the acquisition, Embracer onboards a reputable team of 260+ people across three studios in Poland, adding a solid platform in an important and growing hub for game development in Europe.

The day one purchase price is equivalent to MUSD 137.2 on a cash and debt free basis and is paid in cash to Supernova Capital LLP, a well-known private equity firm in the games sector. Additionally, a management incentive program has been set up in order to align interests going forward. The incentive program amounts to a combined maximum MUSD of 7.1 in Embracer B-shares and is subject to fulfilment of agreed milestones and commitments to stay engaged in FWH over the coming 5 years.