Take-Two Interactive Acquires Gearbox Leisure For $460 Million

Take-Two Interactive Software program has introduced that it’s going to purchase The Gearbox Leisure Firm from Embracer Group for $460 million.  The Gearbox Leisure Firm will retain Gearbox Software program, Gearbox Montreal, Gearbox Studio Quebec, and the Borderlands and Tiny Tina’s Wonderlands franchises, in addition to Homeworld, Threat of Rain, Brothers in Arms, and Duke Nukem. Nonetheless, the Embracer Group will retain Gearbox Publishing San Francisco, together with the publishing rights to the Remnant franchise, Hyper Gentle Breaker, and different “notable unannounced recreation releases”.

Randy Pitchford, founder and CEO of Gearbox Leisure commented on the announcement saying:

”As a major long-term Embracer Group shareholder, I consider within the technique for the Embracer Group going ahead and am utterly satisfied that this transaction is the very best situation and an apparent internet constructive association for Embracer Group, for Take-Two and, in fact, for Gearbox Leisure. My major curiosity is at all times Gearbox, particularly our expertise and our prospects. I wish to personally guarantee followers of our video games that this association will make sure that the experiences we’ve got in growth at Gearbox would be the greatest they’ll probably be.”

Lars Wingefors, co-founder and CEO of Embracer.

“At the moment’s announcement marks the results of the ultimate structured divestment course of and is a vital step in reworking Embracer into the long run with notably decrease internet debt and improved free money move. Via the transaction, we decrease enterprise threat and enhance profitability as we transition to changing into a leaner and extra centered firm. After evaluating a number of choices for Gearbox, I’m comfortable that we’ve got reached an answer that’s in the very best curiosity of all stakeholders. Randy and the workforce have been nice workforce members all through the previous years, and I want to thank all of them for that. As one of many world’s best video games builders, I’m assured that Gearbox will proceed to innovate and thrive of their new dwelling inside Take-Two.”

Further particulars through Embracer:

Transaction key elements

The acquisition value on a money and debt free foundation and assuming a normalized stage of working capital quantities to USD 460 million (SEK 4.9 billion) and shall be topic to changes by customary buy value mechanics.
The consideration at closing shall be paid 100% in newly issued Take-Two shares. The variety of Take-Two shares shall be calculated by dividing the acquisition value by the amount weighted common closing value per share on the Nasdaq International Choose Market throughout the 5 buying and selling day interval ending on the buying and selling day instantly previous to the time limit. Embracer’s intent is to promote these shares to obtain money proceeds quickly after closing. Closing is predicted in Q1 FY 24/25, ending June 2024.
Following buy value changes, transaction prices, share sell-down and earnout settlements (together with earnouts earned and as a result of be beforehand paid in Q1 FY 24/25) the anticipated internet money proceeds quantity to roughly USD 300-330 million (SEK 3.2-3.5 billion).
Money earnouts in accordance with non-GAAP shall be diminished by SEK 1.6 billion in comparison with the group complete of SEK 6.3 billion as of Q3 FY 2023/24 and of a complete most of roughly 30 million B shares in share earnout obligations roughly 18 million B shares shall be diminished. In reference to closing, the remaining roughly 12 million B shares will nonetheless be issued as settlement of sure earnout obligations.
The divested belongings embody:

Gearbox Software program (Frisco, Texas)
Gearbox Montréal
Gearbox Studio Quebec
Borderlands and Tiny Tina’s Wonderlands franchises, in addition to Homeworld, Threat of Rain, Brothers in Arms and Duke Nukem

The retained belongings embody:

Gearbox Publishing San Francisco (to be renamed previous to closing, previously named Good World Leisure), together with the publishing rights to the Remnant franchise, the upcoming Hyper Gentle Breaker and different notable unannounced recreation releases
Cryptic Studios, together with MMO titles Neverwinter On-line and Star Trek On-line.
Misplaced Boys Interactive
Captured Dimensions

The retained corporations shall be welcomed and built-in into different elements of Embracer Group within the coming interval. All corporations are anticipated to contribute with a constructive money move going ahead.

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