Embracer Group makes a number of acquisitions

Over the last week or so, Embrace Group has made a few acquisitions that see it becoming the owner of some of the best game developers around. These acquisitions were for Gearbox Software, Aspyr Media, and Easybrain.

Embracer Group’s acquisition of Gearbox Software has been their most significant to date. The firm paid $1.3 billion for the Borderlands franchise developer. As a result, the developer will now become a wholly-owned subsidiary of Embracer Group.

On day one, Gearbox Software will be worth $363 million, which consists of $175 million in newly issued B shares in Embracer Group. Gearbox’s owners are being paid $1 billion if the developer manages to hit some agreed-upon targets over the next six years. $360 million of this will be issued in Embracer Group shares.

In order to realise the full potential of this deal, which could be as much as $1.38 billion, Gearbox Software needs to earn accumulated Adjusted EBITDA of more than $1.3 billion over the next six years. That figure must also include expensed development costs. The developer earned $125 million in revenue in 2019 alone, showing that this figure isn’t entirely out of reach.

2K Games, publisher of the Borderlands franchise, has confirmed that their relationship with Gearbox won’t be affected by the acquisition. This means that the ongoing support for Borderlands 3 will remain exactly as it is.

Gearbox is made up of a team of 550 employees, who now join a staff of 5,500 in Embracer Group. The deal will provide more resources for Gearbox to realise their ambitions, pushing the developer forward in directions they could never have dreamed of without Embracer Group’s influence.

The second acquisition Embracer Group made was for Aspyr Media for $100 million. $60 million will be paid in cash, while the remaining $40 million will be paid in Embracer shares. An additional $350 million is on the cards if the company hits agreed-upon targets by 2028. This is inclusive of $25 million which is only payable upon the release of a specific unreleased product before March 2026.

As a result of the acquisition, Aspyr Media will become a standalone entity under Saber Interactive. This should see their games get more marketing attention since Saber Interactive is well-known for boosting their games through incredible PR.

In 2020, Aspyr Media generated $40.6 million in revenue, and it has several in-development projects currently on the go. This includes one major development project which has an approximate value of $70 million. It’s likely that this is the unspecified project that $25 million of Embracer Group’s deal hinges on.

The final acquisition to mention is Easybrain for $640 million. The mobile publisher’s owners will become the third-largest shareholders in Embracer Group as a result of the deal. A further $125 million is available if targets are met by the mobile publisher.

In 2020, Easybrain reported revenue of $200 million. This was a huge increase from 2019’s $111 million in revenue, showing how much growth the company can experience in just a short amount of time.

It’s Easybrain’s prowess in creating logic puzzles and games that has impressed Embracer Group. This is why the firm made the move to acquire them, adding them to their growing portfolio of phenomenal developers and publishers.

Embracer Group is also looking to expand its free-to-play mobile game catalog with Easybrian under their umbrella.