Less than a year after Embracer Group shut down Saints Row developer, Volition, the company sold off Borderlands developer Gearbox Entertainment to Take-Two Interactive.
A screenshot from Borderlands 3 (2020), Gearbox Software
In a press release, Embracer Group announced, “Embracer Group has today entered into an agreement to divest Gearbox Entertainment, for a consideration of USD 460 million (SEK 4.9 billion) to Take-Two Interactive Software, Inc. (‘Take-Two’).”
While the company has divested of Gearbox Entertainment, it did retain a number of assets including Gearbox Publishing San Francisco (to be renamed), with the publishing rights to the Remnant franchise, the upcoming Hyper Light Breaker and other notable unannounced game releases.”
Of note, Hyper Light Breaker is on the Sweet Baby Inc. detected Steam curator list created by Brazilian gamer KabrutusRambo. The list currently has over 340,000 followers.
A screenshot of Hyper Light Breaker (TBA), Heart Machine
Embracer Group CEO and co-founder Lars Wingefors explained the sale, “Today’s announcement marks the result of the final structured divestment process and is an important step in transforming Embracer into the future with notably lower net debt and improved free cash flow. Through the transaction, we lower business risk and improve profitability as we transition to becoming a leaner and more focused company.”
He continued, “After evaluating several options for Gearbox, I am happy that we have reached a solution that is in the best interest of all stakeholders. Randy and the team have been great team members throughout the past years, and I would like to thank them all for that. As one of the world’s greatest games developers, I am confident that Gearbox will continue to innovate and thrive in their new home within Take-Two.”
A screenshot from Borderlands 3 (2020), Gearbox Software
Randy Pitchford, the founder and CEO of Gearbox added, “As a significant long-term Embracer Group shareholder, I believe in the strategy for the Embracer Group going forward and am completely convinced that this transaction is the best possible scenario and an obvious net positive arrangement for Embracer Group, for Take-Two and, of course, for Gearbox Entertainment.”
“My primary interest is always Gearbox, especially our talent and our customers,” Pitchford said. “I want to personally assure fans of our games that this arrangement will ensure that the experiences we have in development at Gearbox will be the best they can possibly be.”
A screenshot of Tiny Tina’s Wonderlands (2022), Gearbox Software
According to the press release, Take-Two is paying Embracer Group for Gearbox Entertainment in Take-Two shares.
It states, “The consideration at closing will be paid 100% in newly issued Take-Two shares. … Embracer’s intent is to sell these shares to receive cash proceeds soon after closing. Closing is expected in Q1 FY 24/25, ending June 2024.”
A screenshot from Duke Nukem Forever (2011), Gearbox Software
Embracer Group acquired Gearbox Entertainment back in February 2021 for up to $1.3 billion.
The press release at the time stated, “The day one purchase price amounts to USD 363 million in total, on a cash and debt free basis, of which USD 175 million is paid in newly issued Embracer B shares (the ‘Closing Consideration Shares’) and the residual in cash. Subject to fulfilment of agreed financial and operational targets in the next six years, an additional consideration of maximum USD 1,015 million may be paid, of which a maximum of USD 360 million in issued Embracer B shares (the ‘Additional Consideration Shares’) and the residual in cash. To earn the maximum consideration, USD 1,378 million the accumulated Adjusted EBITDA, including expensed development costs, must exceed USD 1,300 million over six years.”
Brothers in Arms: Earned in Blood (2005), Gearbox Software
What do you make of Take-Two purchasing Gearbox, but not Hyper Light Breaker?
