Embracer CEO Lars Wingefors has acknowledged that it is “too early” for the company to “start talking” about acquiring new studios.
Talking to investors – transcribed by RPS – Wingefors said that after cutting more than 1,300 jobs, canceling dozens of games, and closing studios like Timesplitters developer Free Radical and Saints Row developer Volition, the team's “biggest focus and priority” was to “increase profitability and cash flow generation simply by making better products and games.
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“Looking to do more [mergers and acquisitions] “I think it's too early to start talking about restarting the M&A engines,” Wingefors said when asked about future acquisitions.
“We are now in the final phases of considering the future of the group, and that is our biggest focus and priority: how we set up and structure ourselves, and use our assets that we have within the group, and how to make them work together and how We get the most out of working together, using different functions.
“I think that's our goal right now: to increase profitability and cash flow generation, simply by creating better products and games,” Wingefors added.
Interestingly, Embracer said the companies it closed or sold were “cash flow negative” and what remains “is not for sale.”
“We are finalizing the restructuring program now, at the end of March, and the Gearbox restructuring process has been part of that program. We are now being approached, I would say not daily, but weekly, by companies that want to acquire certain assets within the group,” Wingefors explained.
“And I have made it very clear that they are not for sale, because they are a very important part for the group and for the group's shareholders in the future,” Wingefors said.
Embracer, which acquired Gearbox only in 2022, has reached an agreement to sell Gearbox Interactive to Take-Two for $460 million.
Embracer initially purchased Gearbox for $363 million in 2021. The studio's long-awaited rapid sale is part of Embracer's “comprehensive restructuring program,” which began last year after the collapse of a “major partnership.” strategic” of 2 billion dollars in Podemos.
When this transaction is completed, Take-Two will acquire the Borderlands and Tiny Tina's Wonderlands franchises, as well as Homeworld, Risk of Rain, Brothers in Arms, and Duke Nukem. The closure is expected to be completed in the first quarter of fiscal year 24/25, ending in June 2024.
Embracer will continue to retain a number of assets such as Lost Boys, which Gearbox acquired in 2022.
