Embracer Group, a publisher facing challenges, is undergoing a significant transformation by splitting into three separate publicly listed companies. This decision comes after years of acquiring numerous studios and accumulating $1.5 billion in debt.
To address its financial struggles, the company has let go of more than a thousand employees and divested several studios. The failed $2 billion investment deal last year, rumored to involve Savvy Games Group, triggered a company-wide restructuring and led to the sale of entities like Saber Interactive and Gearbox.
Overview of Spin-offs:
As part of the restructuring, Asmodee Group will emerge as a new publicly listed company, focusing on tabletop publishing and distribution. It will oversee 23 owned studios with access to over 300 intellectual properties, including popular titles like Ticket To Ride, Exploding Kittens, and Catan.
Coffee Stain & Friends will concentrate on indie, double-A premium, and free-to-play games for PC, console, and mobile platforms. This entity will include companies such as DECA Games, Easy Brain, AMplifier Invest, and THQ Nordic.
Moreover, Middle-Earth Enterprises & Friends will operate as a triple-A developer and publisher in the PC and console markets. It will retain rights to well-known IPs like The Lord of the Rings and Tomb Raider, housing studios like Crystal Dynamics, Eidos Montreal, Plaion, Dark Horse, and Freemode.
Embracer Group will be rebranded as Middle-earth Enterprises & Friends, with Asmodee Group and Coffee Stain & Friends shares to be listed on Nasdaq Stockholm and distributed as dividends to Embracer Group shareholders.
Asmodee’s shares are anticipated to be listed within the next 12 months, while Coffee Stain & Friends will officially operate as an independent entity in 2025. Embracer confirms the completion of its restructuring program but will review the capital structure of Asmodee and Coffee Stain & Friends before their official spin-off.
New Financing Agreement:
Embracer has secured a financing agreement worth 10.5 billion kr ($962 million) through Asmodee, involving JP Morgan, BNP Paribas, SEB, Societe Generale, and Swedbank. This loan, backed by Asmodee assets, aims to help clear the publisher’s debts and create opportunities for further mergers and acquisitions within Asmodee Group.
Leadership Transitions:
Thomas Koegler, the current Asmodee deputy CEO, will assume the CEO role of the newly formed Asmodee Group in the near future. The existing CEO Stéphane Carville and COO Marc Nunes will join the board of directors.
Anton Westbergh, CEO of Coffee Stain, will spearhead the separation of Coffee Stain & Friends, while Chief Strategy Officer Phil Rogers will lead the transition of Middle-Earth Enterprises & Friends. Embracer Group CEO Lars Wingefors affirms his commitment as the largest shareholder, intending to establish a new long-term ownership structure across all three entities.
In a statement to investors, Wingefors expressed confidence in the new structure, emphasizing the importance of tailored strategies for each business segment to amplify success. The goal is to facilitate growth through distinct market-focused approaches, allowing each entity to thrive without conforming to a single operating model.
