Embracer Group reveals plan to split up into three separate companies

Embracer has been in the news cycle for a while now, but it appears that today’s news might be of the good kind. The company, which appeared to be having some financial problems, has announced it would be splitting into three distinct, publicly listed companies, each with their own focus on a core strategy.

On April 22, 2024, Embracer Group announced its intention to split into three publicly listed entities. These entities include Asmodee Group, Coffee Stain & Friends, and Middle-earth Enterprises & Friends. The announcement on the official releases section of the Embracer site highlights a few key components of this process:

Shares of Asmodee Group (“Asmodee”) and “Coffee Stain & Friends” are intended to be distributed as a dividend to the shareholders of Embracer Group and listed on Nasdaq Stockholm, in accordance with the Lex ASEA rules. “Middle-earth Enterprises & Friends” is intended to remain within the current listed company Embracer Group, which will subsequently be renamed.
The listing and distribution of shares (the “distribution” or “spinoff”) in Asmodee is expected to take place within 12 months and the listing and distribution of shares in “Coffee Stain & Friends” during calendar year 2025.
As part of the Asmodee separation process, Embracer Group has, through Asmodee Group, entered into a new financing agreement amounting to EUR 900 million. The proceeds from the financing are used to repay existing debt and reduce leverage in the remaining Embracer Group. As announced today and further detailed in a separate press release available at embracer.com/investors.
As part of the transformation and ahead of each separation the full capital structure, including both equity and debt, will be reviewed in Asmodee and “Coffee Stain & Friends” to create the best possible long-term foundation for each entity as a separately listed company.
The largest shareholder, Lars Wingefors AB, intends to form a new long-term ownership structure, including the current holdings in Embracer Group (approximately 20% of capital and 40% of votes), and will remain a long-term, active, committed and supportive owner of all three entities.
Shareholders representing more than 50 percent of the capital and votes in Embracer Group have expressed support for the transformation plan.

Interestingly, not all of these companies will be focused entirely on video games. Asmodee Group is expected to be a global leading tabletop games publisher and distributor. As for Coffee Stain & Friends and Middle-earth Enterprises & Friends, it sounds as though these two will be handling the more traditional video game ventures.

Source: Embracer Group

Coffee Stain & Friends will have two priorities: indie and A/AA games. These games will be both premium and free-to-play across PC, console, and mobile devices. Meanwhile, Middle-earth Enterprises & Friends will focus entirely on AAA titles that utilize various intellectual properties including The Lord of the Rings and Tomb Raider.

Kicki Wallje-Lund, Chair of the Board of Embracer Group, notes that this splitting into three separate groups should allow the companies to focus more on a core strategy and leverage their individual strengths.

As mentioned above, Embracer Group has been having a rough time. Recently, the company sold Gearbox Entertainment Company to Take-Two Interactive for $460 million after merging with it in 2021 as part of a $1.3 billion USD deal. Prior to that, Embracer also sold Saber Interactive for $247 million, which took place after five months of layoffs between July and December 2023 where 1,400 employees lost their jobs.

Now that Embracer Group is splitting into three smaller companies, hopefully we start to see some positive news about the projects currently in development. Be sure to keep it locked to Shacknews as we bring you the latest on Asmodee Group, Coffee Stain & Friends, and Middle-earth Enterprises & Friends.