Embracer receives acquisition offers for its subsidiaries on "weekly basis," has no plans to restart its M&A engine
Divestments of Saber Interactive and Gearbox Entertainment were the last major parts of Embracer Group’s restructuring program. The Swedish holding company plans to retain its remaining portfolio, having no plans to enter into any deals in the near future.
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Embracer CEO Lars Wingefors announced the end of the restructuring program during an investor call related to the partial sale of Gearbox to Take-Two.
Restructuring is ending at the end of March, as initially expected. Selling Saber and Gearbox, one of its largest operative groups, was necessary because both companies had “negative cash flow.”
The remaining studios will continue to be part of the holding company despite the proposals received a “weekly basis” from other companies to acquire certain assets. “I’ve been very clear that they’re not for sale, because they’re a very important part for the group and for the shareholders of the group going forward,” Wingefors said (via Rock Paper Shotgun).
It is worth noting that the goal of the restructuring program was to reduce the company’s net debt to at least SEK 8 billion ($760 million). Last month, Wingefors warned investors that this target was “unlikely to be reached” by March 31, implying further divestments. But with the Saber Interactive deal closed and the Gearbox sale announced, it seems that Embracer may be putting an end to that process.
Despite the completion of the restructuring, the Swedish holding company doesn’t plan to resume its shopping spree and acquire new studios.
I think it’s way too early to start talking about restarting the M&A engines again. Now we are in the late phases of the consideration into the future of the group, and that’s our highest focus and priority — how we set up ourselves and structure ourselves, and utilise our assets we have within the group, and have them work together, and how we leverage them better working together, utilising different functions, I think that’s our focus right now, to increase profitability and cash flow generation, by simply making better products and games. CEO of Embracer Group
Before the start of the restructuring program, Embracer Group had 138 internal studios. Since June 2023, it has closed several subsidiaries, including Campfire Cabal, Volition, and Free Radical Design, divested certain assets, and laid off 1,378 employees.
