MENU
back to ALL NEWS

Embracer Group Acquires Gearbox, Easybrain And Aspyr For Up To $2.6B

M&A | ANNOUNCEMENT DATE: 03 FEB 2021
WRITTEN BY | 09 Feb 2021
Embracer Group Acquires Gearbox, Easybrain And Aspyr For Up To $2.6B
M&A
18 NOV 2020
Embracer Group – 13 Acquisitions For $441.5m
img
8 OCT 2020
Embracer Group Has Raised $657m Through The Private Placement
img
16 SEP 2020
Embracer Group Has Acquired Vertigo Games For Up To $136m
img

💵 Three Acquisitions

  • Embracer Group (SSE: EMBRAC B) acquires Gearbox Entertainment, Easybrain, and Aspyr Media for a total consideration of ~$2.6B. With the acquisitions, Embracer expands to the 7th and 8th operating groups and scales its development, publishing, and porting capabilities across various platforms

💵 Gearbox Entertainment

  • Embracer has entered into an agreement to acquire a US-based PC & console AAA game developer The Gearbox Entertainment Company for up to $1.3B, including:

    • $363m upfront (~48% in newly issued shares with 12/24 months lock-up period)

    • $300m operational earn-out (50% in shares) subject to the completion of certain projects and key employees staying employed by Gearbox during the next 6 years

    • up to $390m financial earn-out 1 (~54% in shares), payable only if accumulated adj. EBITDA > $335m over the next 4 years after the transaction (average $84m adj. EBITDA per year)

    • up to $325m financial earn-out 2 (100% in cash), payable only if accumulated adj. EBITDA > $702m over the next 6 years after the transaction (average $117m adj. EBITDA per year)

  • Gearbox generated approximately $123m in Net Sales and $50m in adj. operational EBIT over the Jan-Sep’20 period. Considering annualized financials ($165m Net Sales, ~$65m adj. EBIT) the valuation multiples account for upfront/adj.EBIT 5.6x, upfront+operat.earn-out/adj.EBIT 10.2x, and total.consideration/adj.EBIT 21.2x

  • Founded in 1999, Gearbox performs development and work-for-hire activities under Gearbox Software as well as publishes games with Gearbox Publishing division:

    • As a developer, it is primarily known for its flagship product — the FPS Borderlands series. Gearbox Software has also worked on such huge IPs as Half-Life, Brother in Arms, Duke Nukem, and Halo

    • As a for Gearbox Publishing, it stands behind such games as Homeworld series, Risk of rain 2, We happy few, and Godfall

  • Adding Gearbox as the 7th independent operating group, Embracer gets an M&A platform for further inorganic growth in North America and instant access to $1B+ critical success franchise Borderlands further expanding its premium product portfolio

Source: press release and presentation

Borderlans game.jpg

💵 Easybrain

  • Embracer has entered into a merger agreement with Cyprus-based mobile games developer Easybrain for up to $765m. The total consideration is paid 100% in newly issued shares and includes:

    • $640m upfront paid in four installments: $130m available at closing, $220m with six-months lock-up, $145m after one-year lock-up, and $145m after two-year lock-up (payable if sellers are employed)

    • up to $125m earn-out, payable in two installments:

      • the first tranche paid if accumulated EBIT $189m over Mar’21—Mar’24

      • the second tranche paid if the accumulated EBIT > $219m over Apr’24—Mar’27

  • Based on Easybrain financials in 2020 ($210m Revenue, $70m EBIT), the valuation multiples are 9.1x upfront/EBIT and 10.9x total EV/EBIT

  • Founded in 2016, Easybrain has a diverse portfolio of the various puzzle and logic mobile games, including Pixel Art: Color by Number, Drum Pad Machine, Killer Sudoku, and many other titles

  • Making Easybrain its 8th operative group, Embracer continues increasing exposure to the mobile space following the recently announced acquisitions of Deca (~$100m), A Thinking Ape (~$105m), and IUGO Games. We should probably expect more deals in the mobile space by Embracer

Source: press release and presentation

Easybrain.jpg

💵 Aspyr Media

  • Embracer Group, through its subsidiary Saber Interactive, has entered into an agreement to acquire US-based publisher and developer Aspyr Media for a total consideration of $450m, including:

    • $100m upfront, paid 60% in cash and 40% in newly issued shares

    • $25m operational earn-out, paid 50% in cash if the founders remain employed and a new commercial product is released every year over the next 5 years

    • up to $325m financial earn-out, payable 50% in cash and if the accumulated EBIT is at least higher than $70m over the next 7 years (to receive maximum earn-out accumulated EBIT > $961m)

  • Considering Aspyr’s financial results for 2020 ($40.6m Revenue, $11.4m operational EBIT), the transaction multiples are 8.8x upfront EV/EBIT and 39.5x total EV/EBIT

  • Founded in 1996, Aspyr Media is a video game publisher and developer, best known for its porting capabilities. The company has worked with 11 out of the 15 biggest game publishers

  • Among many other games, Aspyr has ported Civilization V and VI, Star Wars KOTOR, Borderlands 2, and Sim City 4. Aspyr Media’s porting and cross-platform IP expertise will be a great add-on to the existing family of 137 studios

Source: press release and presentation

Aspyr products.jpg

💸 Previous Acquisitions

  • In November 2020, Embracer announced 13 acquisitions including 2 mobile-focused studios, 9 PC/Console studios, 1 QA provider, and 1 PR agency for the total purchase price of up to $441.5m.

  • In September 2020, Embracer Group acquired Vertigo Games for up to $136m, including $59m of an upfront consideration and $77m of a maximum earn-out consideration

  • In August 2020, Embracer Group announced 8 acquisitions: Sola Media, Pow Wow Entertainment, Palindrome Interactive, Rare Earth games, Vermila Studios, Deca Games, New World Interactive, and 4A Games

  • In February 2020, Embracer Group acquired PC and console game developer Saber Interactive for $150m of upfront consideration with an additional earn-out of $375m

  • Among the previous acquisitions of the company are Tarsier Studios, Milestone s.r.l., Goodbye Kansas Game Invest, Gunfire Games, Piranha Bytes, Warhorse Studios, 18POINT2, Coffee Stain, Bugbear Entertainment, and Koch Media

 

Read more
28 March 2021
MTG Acquires Ninja Kiwi And Completes A Direct Share Issue
💵 Three Acquisitions Embracer Group (SSE: EMBRAC B) acquires Gearbox Entertainment, Easybrain, and Aspyr Media for a total ...
READ MORE
M&A
Embracer Group
  • Established in 2008

  • Headquarters — Karlstad, Sweden

  • Founded by — Lars Wingefors, Pelle Lundborg, and Nik Blower

  • Video game holding company

  • Embracer Group owns 77 internal game studios with more than 8,000 employees and contracted employees in more than 45 countries

  • Financial interim report October-December 2020