INSIDE INFORMATION:
The aggregated day one purchase price for the Acquisitions amounts to approximately
The total number of shares that are issued as part of the aggregate consideration, excluding shares issued as part of earn-out structures, amounts to approximately 1,723,000 Embracer B shares issued at a price of approximately
The Acquisitions
All of Embracer's operating units - THQ Nordic,
The announced Acquisitions are aligned with Embracer's growth strategy and is enabled by the group's decentralized operating model. Over the past three years, Embracer has expanded from one to six operating units. Each of these operating units have put in place their own M&A agenda with the purpose of adding additional organic growth opportunities and to improve long term profit and cash flow generation. For Embracer's decentralized operating model to be sustainable and scalable, it is a necessity that most acquisitions are originated and onboarded on the operating unit level. For the Embracer operating model with emphasis on decentralized decision making and independence for local management to work, it is also necessary that founders and management of acquired companies join Embracer with a long-term mindset.
Through the Acquisitions,
Embracer's inhouse developer footprint is expanded by 767 developers, equivalent to a 30 percent increase and brings the total number of internal developers to 3,318. The total headcounts within the group increases to more than 5,700 employees and contracted employees following the Acquisitions. The management depth is further extended by the addition of strong business leaders and local management teams with an impressive track record, where many of the acquired companies are leading premium games developers in their respective countries.
Deca Operating Unit will triple in size in terms of revenues and employees
Embracer entered the free-to-play games segment with the acquisition of
The capital allocation priorities for Embracer are unchanged. The first priority for allocation of operational cash flow from released games to reinvest as much as possible into value enhancing organic growth opportunities, e.g. new game projects. The second priority is to use free cash flow to finance, bolt-on acquisitions in the operating units.
Embracer reiterates the ambition to maintain a strong balance sheet and strives to maintain a net cash position to maintain maximum strategic flexibility. For the right inorganic growth opportunity, financial leverage could temporarily exceed 1,0x operational EBIT to net debt, where operational EBIT is measured as management expectations for the coming twelve months. In such circumstances, leverage should at least return to below 1,0x net debt to operational EBIT over the medium term, either by retaining cash from operations or by raising primary capital in the equity market.
Cash at hand and available credit facilities post the cash payment of the Acquisitions amounts to more than
The shares and dilution
Through the Acquisitions, Embracer may in aggregate issue, including earn-out consideration shares, a total of approximately 6,893,000 shares, meaning that the number of shares in Embracer can increase from 421,139,665 to approximately 428,032,665 B shares, and that the number of votes can increase from 721,731,898 to approximately 728,624,898.
The total number of shares that are issued as part of the aggregate consideration, excluding shares issued as part of earn-out structures, are issued at a price of approximately
The part of the additional consideration for the Acquisitions consisting of Embracer B shares amounts to a maximum of approximately 5,170,000 shares provided that all earn out targets are met. Approximately 1,367,000 B shares being part of the additional consideration are issued at closing of the Acquisitions and subject to such as claw back rights and lock-up restrictions. A maximum of approximately 3,803,000 B shares may be issued in the future as additional consideration subject to fulfillment of certain targets. All earn-out shares are issued at a price of approximately
The Acquisitions will, if all earn-out consideration shares are issued, lead to a dilution of approximately 1.61 percent of the share capital and approximately 0.95 percent of the votes in Embracer based on the number of shares and votes in Embracer following completion of the Acquisitions and issuance of all earn-out consideration shares.
All shares issued as part of the consideration for the Acquisitions, excluding the earn-out consideration shares, are issued based on the authorization from the extra general meeting on
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E-mail: lars.wingefors@embracer.com
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Forward-looking statements
This press release contains forward-looking statements that reflect the company's intentions, beliefs, or current expectations about and targets for the company's future results of operations, financial condition, liquidity, performance, prospects, anticipated growth, strategies and opportunities and the markets in which the company operates. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "intend", "may", "plan", "estimate", "will", "should", "could", "aim" or "might", or, in each case, their negative, or similar expressions. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurances that they will materialize or prove to be correct. Because these statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward-looking statements as a result of many factors. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. Embracer does not guarantee that the assumptions underlying the forward-looking statements in this press release are free from errors and readers of this press release should not place undue reliance on the forward-looking statements in this press release. The information, opinions and forward-looking statements that are expressly or implicitly contained herein speak only as of its date and are subject to change without notice. Neither the Embracer nor anyone else undertake to review, update, confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this press release, unless it is not required by law or Nasdaq First North Growth Market's rule book for issuers.
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