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STOCKHOLM, Nov. 18, 2020 /PRNewswire/ -- Embracer
Group AB ("Embracer"), through its wholly owned subsidiary Koch
Media GmbH, has today entered into an agreement to acquire 100
percent of the shares in the Poland-based Flying Wild Hog ("FWH") from
Supernova Capital LLP. Flying Wild Hog is a renowned and growing
independent Polish developer of AA+ PC and console games such as
the critically acclaimed Shadow Warrior series. The FWH team is
currently working on four projects together with well reputable
external publishers. Through the acquisition, Embracer onboards a
reputable team of 260+ people across three studios in Poland, adding a solid platform in an
important and growing hub for game development in Europe.
The day one purchase price is equivalent to MUSD 137.2 on a
cash and debt free basis and is paid in cash to Supernova Capital
LLP, a well-known private equity firm in the games sector.
Additionally, a management incentive program has been set up in
order to align interests going forward. The incentive program
amounts to a combined maximum MUSD of 7.1 in Embracer B-shares and
is subject to fulfilment of agreed milestones and commitments to
stay engaged in FWH over the coming 5 years.
"Flying Wild Hog has been on our radar for many years because
of their talent, but also because of their ability to scale up with
consistent high-quality work. Flying Wild Hog will remain
independently run by its strong management team within Koch Media,
while exploring the benefits from collaboration with the wider
Embracer Group. Flying Wild Hog will be an engine for growth in
Poland, which is one of the most
dynamic and vibrant developer scenes for premium games
globally" says Lars Wingefors, Founder and Group CEO of
Embracer Group
Background and rationale
Flying Wild Hog was founded by Michal
Szustak, the current CEO, together with developers of CD
Projekt Red and People Can Fly in Warsaw,
Poland in 2009. In 2016, FWH expanded by opening a new
studio in Cracow, followed up by an additional studio in Rzeszów in
2018. The team today consists of more than 260 persons with a
unique and diverse set of skills, originated from developing global
hits for other leading publishers as well as from FWH's own
projects. FWH's released games have together sold more than 9.5
million units[1] since release.
Through the acquisition, Embracer adds one of the few remaining
independent top-quality developers of scale in Europe with strong capabilities of further
growing organically, as well as creating and developing original
IP. The acquisition significantly strengthens Embracer's footprint
in Eastern Europe and represents
Embracer's first owned development team in Poland, a significant and growing hub for game
development in Europe.
The team at FWH in Cracow is the only established
Game-as-a-Service developer on console/PC platforms in Poland and brings new capabilities to the
Embracer group that can be further scaled and leveraged in other
projects going forward. FWH are currently working on an exciting
project pipeline, including developing four titles for publishers
such as Jagex, Devolver Digital and Focus Home Interactive. The 4
new titles will be released starting from FY 21/22. The majority of
the revenues of the 4 games in FWH are generated under ongoing
work-for-hire contracts with notable potential to earn royalty
participations if the titles achieve commercial success.
"Having "The Hogs" join the Koch Media Group is truly great.
Together with the local management we plan to develop the three
studios further on their journey to making AAA games in the coming
years" says Klemens Kundratitz, CEO of the Koch Media
Group.
Going forward, Embracer will see development and royalty cost
savings from future in-house developed IPs as well as publishing
margin savings between Koch Media and FWH. Additional synergies
between FWH and Embracer group companies include among other things
technology sharing, development resources, utilization of IP
catalog and business development. The strategy after the release of
the currently developed four games will be a mixture of continued
collaboration with external companies as well as own games
development based on either new IPs or existing IPs from the
Embracer portfolio.
Within the Embracer Group, Flying Wild Hog will operate as an
independent studio in the Koch Media Group, which has high
confidence in the competence and knowledge that has been
accumulated during FWH's +11 years in the games business. Embracer
and Koch Media look forward to supporting FWH's studios with
long-term investments into new game development projects going
forward.
"We're so excited to see Flying Wild Hog join Embracer
Group's portfolio of globally-renowned game developers. We always
knew there was enormous potential in Flying Wild Hog and we
couldn't be prouder to have been a part of their growth and
success. This new partnership with Embracer will see them reach
even greater heights." says Supernova founder and Managing
Partner Paul Wedgwood.
"We are absolutely thrilled that Flying Wild Hog will be
joining Koch Media and the Embracer family. Koch Media is a
renowned publisher who has embraced our vision to create the most
exciting, fast-paced, over the top action games for players
worldwide. What drives Flying Wild Hog is the ambition to surprise
fans with unique gaming experiences delivered to the highest
quality. By joining forces with the notoriously energetic Embracer
Group and Koch Media, we will be able to continue to grow and focus
on delivering even more ambitious games. We fell in love with
Embracer's vision to build an alliance of diverse and talented
studios who keep their independence and creative freedom. It's an
incredibly compelling opportunity which is why we're delighted by
this partnership and what it holds for our future." says
Michal Szustak, CEO Flying Wild Hog
Studios.
Purchase Price and Management Incentive Program
The day one purchase price of MUSD 135.2 is equivalent to MUSD
137.2 on a cash and debt free basis and is paid in cash to
Supernova Capital LLP. Additionally, a management incentive program
has been set up in order to align interests going forward. The
incentive program, which amounts to combined maximum 7.1 MUSD in
Embracer B-shares is subject to fulfilment of agreed milestones and
commitments to stay engaged over the coming 5 years.
The Management Incentive Shares are issued at completion of the
transaction at a price of SEK 174.06
per share which equals the 20 day volume weighted average price of
Embracer B shares on Nasdaq First North Growth Market up to and
including 17 November 2020, and using
the FX rate USD/SEK of 8.6133 per 17
November 2020.[2] The number of shares in
Embracer thereby increase with 352,038
B shares, from 421,139,665 to 421,491,703 shares (divided on
33,399,137 A shares and 388,092,566 B
shares.
Completion of the transaction
The transaction is not subject to any further condition and is
completed as of November 18,
2020.
Advisers
Ernst & Young AB is providing transaction support and Baker
McKenzie is acting as legal counsel to Embracer in the transaction.
Aream & Co. acted as financial advisor to the Seller and
Sheridans as legal counsel to the Seller.
For additional information, please contact:
Lars Wingefors, Co-founder and Group CEO Embracer Group AB
Tel: +46 708 47 19 78E-mail:
lars.wingefors@embracer.com
Klemens Kundratitz, Co-founder and CEO Koch Media
Tel: +49 162 2525 704
E-mail: k.kundratitz@kochmedia.com
Michal Szustak, CEO Flying Wild
Hog
Tel: +48 668 814 622
E-mail: michal.szustak@flyingwildhog.com
About Embracer Group
Embracer Group is the parent company of businesses developing
and publishing PC, console and mobile games for the global games
market. Embracer Group has an extensive catalogue of over 190 owned
franchises, such as Saints Row, Goat Simulator, Dead Island,
Darksiders, Metro, MX vs ATV, Kingdoms of Amalur, TimeSplitters,
Satisfactory, Wreckfest, Insurgency and World War Z, amongst many
others.
With its head office based in Karlstad, Sweden, Embracer Group has a global presence
through its six operative groups: THQ Nordic GmbH, Koch Media
GmbH/Deep Silver, Coffee Stain AB, Amplifier Game Invest, Saber
Interactive and DECA Games. Embracer Group has 46 internal game
development studios and is engaging more than 4,000 employees and
contracted employees in more than 40 countries.
Embracer Group's shares are publicly listed on Nasdaq First
North Growth Market Stockholm under the ticker EMBRAC B with FNCA
Sweden AB as its Certified Adviser; info@fnca.se +46-8-528 00
399.
Subscribe to press releases and financial information:
https://embracer.com/investors/subscription/
For more information, please visit: http://www.embracer.com
About Supernova Capital LLP
Supernova Capital is a private equity firm focused on realising
the untapped potential of independent game development studios and
their IPs across the globe. Supernova was founded in 2017 by the
key forces behind award-winning London-based studio, Splash Damage: Paul
Wedgwood, Mark Morris, Ross Farrow, and Richard
Jolly. With dozens of #1 hit games to their names and
hundreds of awards and nominations, Supernova draws upon decades of
experience and industry credibility in the AAA game development
space and beyond. Supernova seeks to create a network of talented,
independent creators, offering them the capital and high level
support necessary to establish long-term stability in an
unpredictable industry, all while allowing them to maintain their
creative freedom and independence.
For more information, visit http://www.novacap.uk
Forward-looking statements
This press release contains forward-looking statements that reflect
Embracer's intentions, beliefs, or current expectations about and
targets for Embracer's and the group's future results of
operations, financial condition, liquidity, performance, prospects,
anticipated growth, strategies and opportunities and the markets in
which the Company operates. Forward-looking statements are
statements that are not historical facts and may be identified by
words such as "believe", "expect", "anticipate", "intend", "may",
"plan", "estimate", "will", "should", "could", "aim" or "might",
or, in each case, their negative, or similar expressions. The
forward-looking statements in this press release are based upon
various assumptions, many of which are based, in turn, upon further
assumptions. Although Embracer believes that the expectations
reflected in these forward-looking statements are reasonable, it
can give no assurances that they will materialize or prove to be
correct. Because these statements are based on assumptions or
estimates and are subject to risks and uncertainties, the actual
results or outcome could differ materially from those set out in
the forward-looking statements as a result of many factors. Such
risks, uncertainties, contingencies and other important factors
could cause actual events to differ materially from the
expectations expressed or implied in this release by such
forward-looking statements. Embracer does not guarantee that the
assumptions underlying the forward-looking statements in this press
release are free from errors and readers of this press release
should not place undue reliance on the forward-looking statements
in this press release. The information, opinions and
forward-looking statements that are expressly or implicitly
contained herein speak only as of its date and are subject to
change without notice. Neither Embracer nor anyone else undertakes
to review, update, confirm or to release publicly any revisions to
any forward-looking statements to reflect events that occur or
circumstances that arise in relation to the content of this press
release.
[1]
Including total unit sales and Microsoft's Game Pass
[2] Source: Riksbanken
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Embracer Group
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