Embracer Group, a company which previously purchased and later sold several game developers, has announced that it intends to split into three publicly listed companies. The companies include Asmodee Group, Coffee Stain & Friends, and Middle-earth Enterprises & Friends. The existing Embracer Group listing on Nasdaq Stockholm will be renamed to Middle-earth Enterprises & Friends, and shares of Asmodee Group and Coffee Stain & Friends will be distributed as dividends to shareholders of Embracer Group. Back in January, Embracer Group laid off 97 people from its development, administration, and support services teams, and cancelled a Deus Ex game. It also recently sold off Saber Interactive in a $500 million deal.
Embracer Group chair of the board Kicki Wallje-Lund commented on the announcement in a press release saying:
“The Board of Directors, together with executive management, propose to transform Embracer Group into three separate, listed companies,” “This transformation is an important step in unlocking shareholder value. With this new structure, the three entities will be able to focus on executing their core strategies and leveraging their own strengths, providing more differentiated and distinct equity stories to both existing and new shareholders. After careful evaluation of various strategic alternatives, we strongly believe that this decision will benefit all stakeholders and position us for continued success in the future.”
Embracer Group co-founder and CEO Lars Wingefors added:
“This move has been made with the intention to unleash the full potential of each team and provide them with their own leadership and strategic direction. This is the start of a new chapter, a chapter that I intend to remain part of as an active, committed, and supportive shareholder of all three new entities, with an evergreen horizon. This move towards three independent companies reinforces Embracer’s vision of backing entrepreneurs and creators with a long-term mindset, allowing them to continue to deliver unforgettable experiences for gamers and fans across the globe.”
Additional information via the company:
Following a careful and thorough review, it is the assessment of the Board of Directors that the current Group structure does not create optimal conditions for future value creation both for Embracer Group’s shareholders and other stakeholders. To continue the transformation of Embracer Group into the future for the benefit of all employees, gamers and shareholders, the Board of Directors and the executive management have therefore decided to propose a separation of Embracer Group, creating three separate publicly listed entities: Asmodee, Coffee Stain & Friends, and Middle-earth Enterprises & Friends.
The Board of Directors have concluded the following:
The entities will have sufficient scale, coupled with clearer operational strategies and financial profiles that enable simplified equity stories to attract a larger pool of investors. Current shareholders can freely decide on their capital allocation between the three entities.
Each entity will be able to fully utilize its own balance sheet, its own set of financial targets and optimal financing structure and capital allocation strategy that enable their growth ambitions.
The new structure enables the best possible greenlighting models, portfolios and go-to-market strategies for indie games as well as AAA games through two separate, more focused entities.
Ongoing and future collaboration around intellectual properties, companies and people will still be enabled and encouraged across the entities on market terms.
The three separate publicly listed entities are expected to consist of:
Asmodee, a global leading tabletop games publisher and distributor with an extensive studio network and IP catalogue.
Net Sales of SEK 14.8 billion and Adjusted EBIT of SEK 1.9 billion on a pro forma basis as per LTM[2] December 2023
“Coffee Stain & Friends”, a diverse gaming entity with a dual focus on indie and A/AA premium and free-to-play games for PC/console and mobile, with a high degree of recurring revenues.
Net Sales of SEK 10.9 billion, Adjusted EBIT of SEK 2.8 billion on a pro forma basis as per LTM December 2023.
“Middle-earth Enterprises & Friends”, a creative powerhouse in AAA game development and publishing for PC and console, as well as the stewards of The Lord of the Rings and Tomb Raider intellectual properties, among many others.
Net Sales SEK of 14.1 billion, Adjusted EBIT SEK 2.0 billion on a pro forma basis as per LTM December 2023.
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