Take-Two Interactive Acquires Gearbox Entertainment for $460 Million

Take-Two Interactive Software (NASDAQ: TTWO) has announced a definitive agreement to acquire The Gearbox Entertainment Company from Embracer Group for a sum of $460 million. The deal, expected to close in the first quarter of Take-Two’s fiscal year 2025, pending regulatory approvals, signals a significant expansion for the gaming giant.

The acquisition will see Take-Two inherit a treasure trove of renowned franchises, including the beloved Borderlands and Tiny Tina’s Wonderlands series, along with Homeworld, Risk of Rain, Brothers in Arms, and Duke Nukem. Moreover, Take-Two will assume ownership of Gearbox’s future projects, with six key titles currently in development, including highly anticipated sequels and new intellectual properties.

Gearbox Entertainment, under the leadership of CEO Randy Pitchford, will operate as a studio within Take-Two’s 2K label.

Meanwhile, Embracer Group stands to benefit significantly from the divestment, with proceeds from the sale earmarked to significantly reduce net debt, earnout obligations, and capital expenditure. Embracer retains select assets, including Gearbox Publishing San Francisco, along with publishing rights to franchises like Remnant and upcoming releases such as Hyper Light Breaker.

The transaction, conducted entirely through newly issued shares of Take-Two common stock, underscores the confidence both parties have in the value of the deal. Take-Two’s robust financial position and operational structure are expected to provide synergies that enhance Gearbox’s potential for future growth and innovation.

Upon closing, Embracer Group anticipates a reduction in net debt by approximately SEK 3.2-3.5 billion, along with significant cuts in cash earnout obligations and capital expenditure. The transaction is projected to have an immediate positive impact on free cash flow generation for Embracer Group.

Take Two last traded at $149.25 on the Nasdaq.

Information for this briefing was found via the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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