“I can’t express the excitement I feel as Dark Horse moves into this new chapter in our history. The synergies that exist with the Embracer network of companies promises exciting new opportunities not only for Dark Horse, but also for the creators and companies we work with. I’ve had a number of compelling conversations with Embracer CEO Lars Wingefors and I’m very impressed with him and what he and his team have built. I have to say, the future for our company has never looked brighter,” says Mike Richardson, founder and CEO of Dark Horse.
Background and rationale
Dark Horse is a leading entertainment company founded in 1986 by Mike Richardson and based on the idea of establishing an ideal atmosphere for creative professionals: where writers and artists were treated as partners. This formula attracted top creative talent, and 30 years later the company has grown to become the third-largest comics publisher in the United States, with a successful track record of producing films and TV series as well.
Through the acquisition, Embracer strengthens its transmedia capabilities by adding expertise in content development, comics publishing, and film & TV production. Dark Horse owns or controls more than 300 intellectual properties, many of which can build a strong foundation for the future development of transmedia IPs and the opportunity to cross-fertilise IP and strengthen licensing partnerships across PC, console, VR and mobile.
Dark Horse is headquartered in Milwaukie, Oregon, USA, has entertainment offices in Los Angeles, California, USA and has 181 employees across its three business units:
Dark Horse’s growing library includes over 300 compelling intellectual properties. With a structure and proven ability to produce IP, partner with top creative talent, and create brands and global hits, Dark Horse is in a strong position in a market where entertainment content is in high demand. This proof-point can be seen in Dark Horse’s strong pipeline of over 40 projects at Netflix, Amazon, Syfy, Sony, MGM, Universal, and Warner Media.
Additionally, there is untapped potential in creating games based on Dark Horse IP and substantial opportunity for synergies within the Embracer group, both within the Dark Horse Comics and Dark Horse Entertainment.
In the calender year 2021 Dark Horse will generate net sales of approximately SEK 900 million with operational EBIT of approximately SEK 130 million. Dark Horse is forecasted to generate operational EBIT of SEK 140-180 in FY22/23 and SEK 170-200 million in FY 23/24. These figures excludes any commercial synergies or planned M&A.
Purchase price
Due to commercial reasons the specific transaction terms are not disclosed. The transaction will be accretive to adjusted earnings per share.
80 percent of the shares of Dark Horse will be acquired from a seller based in Hong Kong and China. The remaining 20 percent of the shares will be acquired from founder and CEO, Mike Richardson and COO Neil Hankerson. Both are committed to stay within the company. Post completion of the acquisition business will remain as usual and there is no planned restructuring.
Completion of transaction
The transaction is subject to certain closing conditions, including merger control approval, and is estimated to be completed early 2022.
Advisors
EY acted as financial advisor and Skadden, Arps, Slate, Meagher & Flom acted as legal advisor to Embracer in connection with the Transaction. Lazard acted as financial advisor and White & Case acted as legal advisor to the seller.
For additional information, please contact:
Lars Wingefors, Co-founder and Group CEO Embracer Group AB
Tel: +46 708 47 19 78
E-mail: lars.wingefors@embracer.com
Mike Richardson, Founder and CEO of Dark Horse
Tel: +1 503 905 2357
E-mail: miker@darkhorse.com
About Embracer Group
Embracer Group is the parent company of businesses developing and publishing PC, console and mobile games for the global games market. The Group has an extensive catalogue of over 250 owned franchises, such as Saints Row, Goat Simulator, Dead Island, Darksiders, Metro, MX vs ATV, Kingdoms of Amalur, TimeSplitters, Satisfactory, Wreckfest, Insurgency, World War Z and Borderlands, amongst many others.
With its head office based in Karlstad, Sweden, Embracer Group has a global presence through its eight operative groups: THQ Nordic, Koch Media, Coffee Stain, Amplifier Game Invest, Saber Interactive, DECA Games, Gearbox Entertainment and Easybrain.
The Group has 86 internal game development studios and is engaging more than 9,000 employees and contracted employees in more than 40 countries.
Embracer Group’s shares are publicly listed on Nasdaq First North Growth Market Stockholm under the ticker EMBRAC B with FNCA Sweden AB as its Certified Adviser; info@fnca.se +46-8-528 00 399.
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Important information
The release, announcement or distribution of this press release may, in certain jurisdictions, be subject to restrictions. The recipients of this press release in jurisdictions where this press release has been published or distributed shall inform themselves of and follow such restrictions. The recipient of this press release is responsible for using this press release, and the information contained herein, in accordance with applicable rules in each jurisdiction. This press release does not constitute an offer, or a solicitation of any offer, to buy or subscribe for any securities in Embracer in any jurisdiction, neither from Embracer nor from someone else.
This announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in Embracer’s shares. Any investment decision regarding Embracer’s shares must be made on the basis of all publicly available information relating to the company and the company’s shares. The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. This announcement does not constitute a recommendation. Each investor or prospective investor should conduct his, her or its own investigation, analysis and evaluation of the business and data described in this announcement and publicly available information. The price and value of securities can go down as well as up. Past performance is not a guide to future performance.
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. Embracer 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 Embracer 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, unless it is not required by law or Nasdaq First North Growth Market’s rule book for issuers.
Embracer Group is a global group of creative and entrepreneurial businesses in PC/console, mobile and tabletop games and other related media. The Group has an extensive catalog of over 900 owned or controlled franchises.
With its head office based in Karlstad, Sweden, Embracer Group has a global presence through its ten operative groups: THQ Nordic, PLAION, Coffee Stain, Amplifier Game Invest, DECA Games, Easybrain, Asmodee Group, Dark Horse Media, Freemode and Crystal Dynamics – Eidos. The Group has 103 internal game development studios and is engaging more than 10,000 employees in more than 40 countries.
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