Embracer Group acquires Appeal Studios, Kaiko, Massive Miniteam and Ffame Break for up to $14.75m

? Corporate acquisitions 

• Sweden-based video game holding company Embracer Group (SSE: EMBRAC B) has acquired four gaming companies through the two wholly-owned subsidiaries:
  
  • THQ Nordic GmbH acquired Appeal Studios, KAIKO, and Massive Miniteam
  • Amplifier Game Invest AB acquired FRAME BREAK
• The total purchase consideration can reach $14.75m paid with a mix of cash and Embracer B-shares, including:
  
  • $8.45m upfront on a cash and debt-free basis
  • $6.3m earn-out consideration, paid over a five-year term if the agreed financial benchmarks are met
• THQ Nordic also formed a new structure in Bosnia and Herzegovina. Gate21 will work on the development of “world-class 3D characters”

? Strategic Rationale 

• With these acquisitions, Embracer continues to implement its inorganic growth strategy. Since the beginning of 2020, Embracer has acquired 33 companies, including the announced 4 studios
• Embracer has grown from one to eight operating units in the last three years. To ensure the sustainability and scalability of Embracer’s decentralized operating model, the majority of acquisitions must be originated and executed at the operating unit level
• Though the acquired studios are smaller than most of the previously acquired ones, they may become a great supporting addition to the bigger players in Embracer’s ecosystem, including porting expertise of KAIKO and Massive Miniteam studios
• Overall, Embracer brings over 90 employees onboard, further increasing its presence in Europe

?  Appeal Studios 

• THQ Nordic has purchased Charleroi, Belgium-based PC & console game developer Appeal Studios
• Appeal Studios was originally founded in 1995 by Yves Grolet, Franck Sauer, and Yann Robert, and has previously been known for Outcast (1999) and several other action-adventure titles for PS and PCS. However, the company was closed due to bankruptcy reasons and subsequently relaunched in 2015
• The team of 55 employees is currently working on an unannounced open-world sci-fi action-adventure 

?  KAIKO 

• THQ Nordic GmbH has acquired Frankfurt, Germany-based cross-platform game studio KAIKO
• Established in 2014 by Chris Hülsbeck, Frank Matzke, and Peter Thierolf, the company currently employs 10 people
• The studio is known for its game development and porting capabilities. Kaiko ported or remastered such games as Kingdoms of Amalur, Red Faction Guerrilla, and Darksiders, to new generations of consoles

?  Massive Miniteam

• Pulheim, Germany-based indie games developer Massive Miniteam was acquired by THQ Nordic’s subsidiary HandyGames
• Founded by Tim Schroeder, the company has participated in porting various titles to consoles. It has also helped to bring several games to virtual reality
• Massive Miniteam will be completely incorporated into the HandyGames organization, functioning under the THQ Nordic operative group
• The studio has been established in 2018 and has 20 people employed

? FRAME BREAK

• Indie studio FRAME BREAK with its headquarters in Skövde, Sweden was acquired by Embracer’s subsidiary Amplifier Game Invest AB
• FRAME BREAK creates original IP games for PC and console platforms
• The studio was founded in 2020 by a group of developers with Joakim Hedström as CEO and currently employs 5 people
• The company will become a wholly-owned subsidiary of Amplifier Game Invest, among other 13 game development companies

? Previous Acquisitions 

• In February 2021, Emracer purchased Gearbox Entertainment, Easybrain, and Aspyr Media for a total consideration of ~$2.6B. The acquisitions have expanded the company into the 7th and 8th operating groups and scaled its growth, publishing, and porting capabilities across multiple platforms
• 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

Source: EMBRACER PRESS RELEASE

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