Saber Interactive Leaves Embracer Group for $247 Million, Stops all Operations in Russia

Embracer Group has announced that it has partnered with Beacon Interactive to sell Saber Interactive for $247 million. Beacon Interactive is controlled by Saber Interactive co-founder Matthew Karch. As part of the deal, all Saber Interactive-branded studios, DIGIC, Fractured Byte, Mad Head Games, New World Interactive, Nimble Giant Entertainment, Sandbox Strategies, Slipgate Ironworks, and 3D Realms. Through this divestment, Embracer will cease all operations in Russia, while immediately improving cash flow, reducing capex, net debt and future liabilities.However, according to a report by Bloomberg’s Jason Schreier, a letter from Saber Interactive CEO Matt Karch to staff revealed that the company will bring along 4A Games and Zen Studios through options, amounting to a total purchase price of around $500 million. Embracer Group will still retain the company’s subsidiaries 34BigThings, Aspyr, Beamdog, Demiurge Studios, Shiver, Snapshot Games, Tripwire Interactive, and Tuxedo Labs. These studios will be integrated into other parts of Embracer Group in the coming period.The retained pipeline includes 14 games to a book value of around SEK 0.5 billion. The retained projects, including two joint projects with the Buyer, include:

• The next AAA game from 4A Games
• An unannounced concept phase AAA game
• A previously announced AAA game based on a major license
• A new AAA multiplayer shooter based on a controlled IP
• A new AA game based on an Asmodee IP
• A new AA game from 34 Big Things based on an owned IP
• Killing Floor 3
• Teardown (ongoing development)
• The full upcoming pipeline and back catalog from Zen Studios, Aspyr and Tripwire

Lars Wingefors, co-founder and Group CEO of Embracer commented on the announcement:

“I am pleased that we have found a win-win solution for Embracer and the parts of Saber that now will leave us. This transaction puts both companies in a stronger position to thrive going forward. Embracer is now able to discontinue all operations in Russia, according to a previous board decision, while safeguarding many developer jobs under new independent ownership. At the same time, we keep key companies, valuable IPs and future publishing rights. Cash flow is immediately improved, and we remain committed to reducing net debt. The transaction yields additional headroom to amortize debt in accordance with existing bank agreements and will improve financial flexibility. This is the first transaction of the previously mentioned structured processes and marks a small but important step in our journey to transform Embracer into the future for the benefit of all employees, gamers, and shareholders”

Matthew Karch, co-founder of Saber Interactive and director of Beacon Interactive:

“Over the past four years, I have been proud to be part of Embracer’s amazing transformation into one of the leading game companies in the world. As part of the company’s efforts to reorganize for a changed industry and geopolitical challenges, we jointly felt it was the right decision for both Embracer and the core of Saber to part ways. This divestment leaves both parties in much better positions to grow our respective businesses. I will continue to remain a large, long-term shareholder of Embracer and we will remain partners on several ongoing and future projects. This transaction also safeguards the livelihoods of hundreds of professionals, many of whom I have worked with for over two decades.”

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