Embracer confirms $247m sale of Saber assets and withdraws from Russia

Embracer has officially sold off Saber Interactive, the group which is home to studios 3D Realms, Slipgate Ironworks and more, for $247 million.

In an announcement to investors on Thursday, Embracer said the sale meant it would now cease all operations in Russia, while improving its cash flow.

Saber is being sold to a group of private investors under Beacon Interactive, a company controlled by Saber Interactive co-founder Matthew Karch.

Saber will keep studios Nimble Giant (Star Trek Infinite), 3D Realms (Ion Fury), Sandbox Strategies, New World Interactive (Insurgency), Slipgate Ironworks (Graven), Mad Head Games (Scars Above), Fractured Byte (Borderlands Legendary Collection and Digic.

Embracer will retain Tripwire (Chivalry), Beamdog (Mythforce), Tuxedo Labs (Teardown), Demiurge, Shiver (Lucius), Aspyr (Star Wars Battlefront Classic Collection), Snapshot Games (Phoenix Point) and 34BigtThings (Redout).

Saber’s buyer has also been granted an option right to acquire 4A Games and Zen Studios for a fixed price within a certain time period.

“Due to commercial reasons the parties have agreed not to disclose full terms,” Thursday’s announcement reads. “The Board of Embracer is, however, confident that the exercise price stipulated in the option right reflects at least the studios’ market value and is significantly higher than the current net book value (including goodwill) of USD 81 million (SEK 829 million).”

Long-term license and publishing rights to all current and future PC/console games in the Metro franchise are held within the Embracer’s PLAION group. These rights will not change regardless of whether the option rights are exercised, it said.

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

Since last summer Embracer has been carrying out a widespread money-saving operation, announcing that it was implementing a restructuring plan which would involve the closure of studios and the cancellation of projects.

The restructuring resulted in 1,387 job cuts, or about 8% of its global workforce, during the six months ended in December. This included cutting 871 internal game developers, 252 internal non-developers, and 264 external developers.

Embracer also confirmed last month that, during a six-month period in 2023, it cancelled 29 unannounced games.