Saber Interactive to split from Embracer Group [Update]

Embracer Group has entered into an agreement to sell Saber Interactive to Beacon Interactive, a company controlled by Saber Interactive co-founder Matthew Karch, for a purchase price of USD $247 million, the company announced.

As part of this divestment, Embracer Group will cease all operations in Russia, immediately improving the company’s cash flow, and reducing capex, net debt, and future liabilities.

Saber Interactive will retain the following subsidiary studios after the split: All Saber Interactive-branded studios, DIGIC, Fractured Byte, Mad Head Games, New World Interactive, Nimble Giant Entertainment, Sandbox Strategies, Slipgate Ironworks, and 3D Realms.

Embracer Group will retain the following Saber Interactive subsidiary studios: 34BigThings, 4A Games, Aspyr, Beamdog, Demiurge Studios, Shiver, Snapshot Games, Tripwire Interactive, Tuxedo Labs, and Zen Studios. These studios will be integrated into other parts of Embracer Group in the coming period.

Saber Interactive will be granted the right to acquire 4A Games and Zen Studios within a certain time period, but if it decides to do so, long-term license and publishing rights to all current and future games in the Metro franchise will continue to be held by Embracer Group subsidiary PLAION.

The pipeline of Embracer Group’s retained studios includes 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 conrtolled intellectual property, a new AA game based on an Asmodee intellectual property, a new AA game from 34BigThings based on an owned intellectual property, Killing Floor III, post-launch support of Teardown, and the full upcoming pipeline and back catalog from Zen Studios, Aspyr, and Tripwire Interactive.

“I am pleased that we have found a win-win solution for Embracer and the parts of Saber that now will leave us,” Embracer Group co-founder nd CEO Lars Wingefors said in a press release. “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.”

Saber Interactive co-founder and Beacon Interactive director Mtathew Karch added, “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.”

Update 9:15 a.m.: According to a letter from Saber Interactive CEO Matt Karch to staff obtained by Bloomberg journalist Jason Schreier, who first reported on Saber Interactive going independent back in February, Saber Interactive will bring along 4A Games and Zen Studios through options, amounting to a total purchase price of around $500 million.

“Today, through a company we formed called Beacon Interactive, we have agreed to buy back the rights to Saber (and all of its worldwide studios and exclusive contractor relationships), Mad Head, DIGIC, Nimble Giant, Fractured Byte, Slipgate, 3D Realms, New World Interactive, SPL, Stuntworks, Bytex, 4A and Zen (through options), totaling over 3,000 developers across the world,” an excerpt from the letter reads. “We have decided precisely on these studios for acquisition because we believe they represent the best of what Saber is and can be. This group comprises some of the most talented and creative developers in the world. Our track record and more importantly the projects we have in development speak volumes about our capabilities. I truly believe that we currently have the best collection of game developers in the industry thanks to all of you.”