Gearbox Acquired by Embracer Alongside Aspyr Media and Easybrain

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The gaming industry continues its path towards consolidation with the acquisition of Gearbox, developer of Borderlands and one of the biggest independent companies, by Embracer Group. Once the deal is done, Gearbox is set to become the seventh operating group under Embracer.

Lars Wingefors, Founder and Group CEO of Embracer Group, said:

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Gearbox is arguably one of the most creative and valuable independent developers in the world. We believe that the resources offered by Embracer will position Gearbox for continued significant growth in the years to come.

Randy Pitchford, founder of The Gearbox Entertainment Company, added:

Lars’s vision of Embracer as an allied partner group committed to fueling and accelerating the ambitions of a series of decentralized, successful entrepreneurial member companies while magnifying the collective value and advantages of diversification across the entire group is the most brilliant strategy and design for short, medium, and long-term success in this industry that I have worked in during 30 years. The feeling at Gearbox is that we are just getting started and this transaction is not merely a stimulant for the talent of our employee-owned company, but a propellent for the exciting future we have planned.

The structure of the deal is heavily based on performance. The 'day one price' is $363 million, of which $175 million is paid in newly issued shares and the rest in cash. Then, over the next six years and subject to fulfillment of certain operational goals, an additional $1.015 billion may be paid ($350 million of which in shares, the rest in cash), for a grand total of $1.378 billion.

2K Games, for its part, confirmed that publishing for Borderlands will remain firmly in its grasp with the following statement from a spokesperson:

As the proud publisher of the Borderlands franchise, we are happy for our partners at Gearbox and this exciting new chapter for their organization. The merger does not change 2K’s relationship with Gearbox nor our role as the publisher for the Borderlands IP or any other projects we are currently working on with the studio. We look forward to continuing our long-term partnership with this incredibly talented team and delivering many more exciting entertainment experiences to gaming fans around the world.

Embracer Group, which already acquired many developers (and IPs) over the last five years or so, didn't stop there today. They also set up two additional major acquisitions, including mobile developer Easybrain (for up to $765 million) and Aspyr Media (for up to $450 million). The latter is known mainly for its work on macOS, Linux, and mobile ports and will be a standalone entity under Embracer's wholly-owned subsidiary Saber Interactive.

Matthew Karch, CEO of Saber Interactive and Director of the Embracer Board, said:

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I have been a fan of Aspyr for longer than I have been in the industry. Michael and Ted are true entrepreneurs that have built a business by identifying and exploiting opportunity where no one else saw it. They are a perfect fit for Embracer and I am proud to now call them partners. Together we will be able to greatly expand our development and publishing activities here in the US. Stay tuned for details on some of the amazing games we have under joint development. Today is a truly amazing day for Saber and the entire Group.

Michael Rogers, Co-founder and CEO Aspyr, added:

We are thrilled to join forces with Saber and to become part of the entire Embracer family. We are confident that Embracer is the ideal partner for us as we look to accelerate growth and execute on our exciting pipeline. We have been in the games industry for two and a half decades, but it feels like we are just getting started. We look forward to exploring opportunities to collaborate with other entrepreneurs within the wider Embracer Group to bring celebrated games to our fellow gamers around the world.

What's even more interesting is that the press release outlining the deal with Aspyr also mentions that the company has several games under development, including one major title with an AAA-sized budget of $70 million. We look forward to learning more about this one and reporting here as soon as possible, of course.

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