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Quote:
Proceeds from the sale of this transaction amounted to €565 million for Eurazeo and its investors, including €426 million for the Eurazeo share, a multiple of almost 4x its initial investment and an Internal Rate of Return (IRR) of about 35%.
In September 2021, PAI Partners was reportedly aiming to sell Asmodee for €2 billion:PAI Partners is prepping @Asmodee_fr for sale with a price tag of 2bn, according to French site L'Agefi (https://t.co/tFY96EXpHH), with English site Unquote picking up the news here: https://t.co/Z1V8BbHp4F.
— BoardGameGeek (@BoardGameGeek) September 23, 2021
Both sites are paywalled, but here's the summary image: —WEM pic.twitter.com/reiriVsoev
As it turns out, however, PAI Partners will net even more for its brief ownership of the company thanks to a €2.75 billion deal with Sweden's Embracer Group AB. Embracer Group is the parent company of businesses that develop and publish PC, console, and mobile games. From the company website: "The Group has an extensive catalogue of over 250 owned franchises, such as Saints Row, Goat Simulator, Dead Island, Darksiders, Metro, MX vs ATV, Kingdoms of Amalur, TimeSplitters, Satisfactory, Wreckfest, Insurgency, World War Z, and Borderlands amongst many others."
Here is the majority of a regulatory press release from Embracer Group. (For reference, SEK 1 is approximately US$ .11 or €.10, so SEK 9 billion would be US$990 million or €900 million.):
Quote:
Embracer Group AB ("Embracer"), has today entered into exclusive negotiations to acquire Financière Amuse Topco SAS ("Asmodee") from funds advised or managed by PAI Partners SAS ("PAI") and the other shareholders of Asmodee. Subject to completion of the consultation of the relevant works council of the Asmodee group on this proposed transaction, and exercise by the shareholders of Asmodee of their option to sell, Embracer and the shareholders of Asmodee would execute a share purchase agreement to complete the transaction. If the acquisition is eventually completed, it would mark a strategic step broadening the Embracer Group eco system, since Asmodee and Embracer share a natural and strong bond in their strategy and cultures...
The Contemplated Transaction
• The day one consideration is approximately EUR 2.75 billion in total.
• EUR 350 million would be paid to the main shareholder, PAI, and certain other minority shareholders in newly issued Embracer B shares (the "Closing Consideration Shares") and approximately EUR 2.4 billion in cash and debt refinancing.
• Asmodee's other minority shareholders would sell the majority of their shares upfront for cash, and retain a minority interest of approximately 4 percent of the shares which would be subject to put and call options, exercisable in year 2, 5 and 6, pursuant to which such shareholders could receive a maximum of 40,984,678, newly issued Embracer B shares (the "Additional Consideration Shares").
• If the put option is exercised by the current shareholders of Asmodee, and subject to clearance by all applicable antitrust authorities, the transaction would be expected to close the first half of the calendar year 2022.
• Asmodee's CEO Stéphane Carville together with his management team would continue to lead the new operating group. Asmodee would continue to operate as before the transaction with no reorganization expected driven by the transaction.
• The acquisition would be financed by cash at hand, available credit facilities and new credit facilities from Nordea Bank, SEB and Swedbank. The new unsecured credit facility would consist of a SEK 6 billion term loan with expiry in 30 months, as well as SEK 12 billion in bridge loans. Embracer expects its average interest rate on utilized gross debt in the group would be less than 1.00 percent going forward. Embracer would expect to refinance the bridge loans in the next 12 months, whereas the term loan would add long term strategic flexibility. Post-closing of the acquisition of Asmodee, Embracer would expect to have more than SEK 9 billion in liquid funds to support investments in organic growth and enable additional acquisitive growth.
Key Rationale
• If the transaction is completed, Asmodee would become the ninth operating group of Embracer, moving Embracer towards becoming a leading independent global gaming eco-system and becoming Europe's largest gaming group.
• Strong strategic and cultural fit between the companies. The combined new group would on pro forma basis have more than 11,300 employees and contracted employees across more than 50 countries. The new group would have 108 own game development studios and more than 560 owned IPs and brands.
• The acquisition adds, immediately accretive to shareholders, approximately 30 percent in forecasted Operational EBIT with approximately 7.5 percent dilution of outstanding shares (based in the number of shares today including the shares that would be issued as part of the purchase price and put option).
• Increased financial scale and diversification of Embracer group. The combined group would have a forecasted Operational EBIT range of SEK 9.0-11.0 billion during FY 22/23 and SEK 9.8-12.9 billion during FY 23/24.
Financial Highlights Asmodee
• Pro forma Net Sales of Asmodee for this calendar year is estimated to be EUR 1.1 billion, Pro forma Adjusted EBITDA EUR 240 million and Pro forma Adjusted Operational EBIT EUR 206 million.
• Forecasted Operational EBIT contribution FY22/23 (March 2023) SEK 2,000-2,500 million and FY 23/24 (March 2024) SEK 2,300-2,900 million. These forecasts exclude further planned M&A.
• The healthy profitability of Asmodee is coupled with solid free cash flow generation, driven by a capex-light business model and efficient working capital management processes. Historically Asmodee has yielded a pre-tax free cash flow conversion of approximately 70-80 percent. The transaction is expected to be immediately accretive to FCF per share.
• Asmodee management expects to have a double digit organic profit growth over the coming five-year period
Asmodee in brief
Asmodee, with its headquarters in Paris, France, was founded in 1995, and is a leading international publisher and distributor for board games, trading cards and digital board games with over 39 million games sold annually in more than 50 countries. Through 22 fully owned studios and 300+ IPs, Asmodee creates a dynamic transmedia experience for players across a variety of digital and physical platforms. Asmodee has a portfolio of 970+ games, of which some of the iconic game titles include Catan, Ticket to Ride, Pandemic, Dixit, Splendor, 7 Wonders, Just One, Dobble/Spot it!, Azul, Unlock!, Bezzerwizzer and Exploding Kittens. Asmodee also establishes licensing and distribution partnership with leading entertainment and technology companies on successful IPs such as Pokémon, Magic: The Gathering, Disney, Harry Potter, Lord of the Rings, Star Wars, Marvel, Dungeons & Dragons and Carcassonne. With a global force of over 2,300 FTEs, Asmodee operates in 50+ jurisdictions across Europe, North America, South America and Asia, of which 21 with direct presence.
Asmodee is to date owned by PAI and certain minority shareholders of Asmodee. Asmodee's CEO Stéphane Carville together with his management team would continue to lead the new operating group. Following completion of the transaction, PAI would hold approximately four percent of the shares in Embracer, and the minority shareholders would hold up to four percent of the shares in Embracer depending on to what extent and at what terms the agreed put and call options would be exercised
Background and Rationale
If the transaction is completed, this would mark a transformative step in Embracer's strategy within gaming and entertainment as outlined at the September AGM:
• Creates Europe's largest gaming group and establishes an important market leading position in board games, a category that is highly complementary to PC, console, VR and mobile games and with appealing long term organic growth outlook.
• Offers the opportunity to cross-fertilise IP and strengthen licensing partnerships across PC, console, VR, mobile, board and trading card games.
• Strong foundation for the future development of transmedia IPs.
• Ability to leverage the omni-channel distribution network to drive efficiencies across existing and new markets.
• Providing a proven platform for value-accretive M&A, complemented by a sizeable funnel for future opportunities within board games, trading card games & collectables.
• Shared strong cultural fit, with a similar integrated model operating across the value chain, from IP through to publishing and distribution.
• Enhancing the new Group's strong financial profile, with added diversity, predictability, resilience, and immediate accretion to adjusted earnings per share and free cash flow per share.
If the acquisition is completed, Embracer would onboard one of the market leading independent global players in a large, growing, highly resilient board gaming market with proven experience of creating long-lasting franchises and delivering strong original content. The acquisition would create Europe's largest gaming group, and would enable collaboration within Embracer in terms of development, publishing, technology, IPs as well as a platform for further M&A. Asmodee would become the ninth operating group, continuing to operate independently.
The Contemplated Transaction
• The day one consideration is approximately EUR 2.75 billion in total.
• EUR 350 million would be paid to the main shareholder, PAI, and certain other minority shareholders in newly issued Embracer B shares (the "Closing Consideration Shares") and approximately EUR 2.4 billion in cash and debt refinancing.
• Asmodee's other minority shareholders would sell the majority of their shares upfront for cash, and retain a minority interest of approximately 4 percent of the shares which would be subject to put and call options, exercisable in year 2, 5 and 6, pursuant to which such shareholders could receive a maximum of 40,984,678, newly issued Embracer B shares (the "Additional Consideration Shares").
• If the put option is exercised by the current shareholders of Asmodee, and subject to clearance by all applicable antitrust authorities, the transaction would be expected to close the first half of the calendar year 2022.
• Asmodee's CEO Stéphane Carville together with his management team would continue to lead the new operating group. Asmodee would continue to operate as before the transaction with no reorganization expected driven by the transaction.
• The acquisition would be financed by cash at hand, available credit facilities and new credit facilities from Nordea Bank, SEB and Swedbank. The new unsecured credit facility would consist of a SEK 6 billion term loan with expiry in 30 months, as well as SEK 12 billion in bridge loans. Embracer expects its average interest rate on utilized gross debt in the group would be less than 1.00 percent going forward. Embracer would expect to refinance the bridge loans in the next 12 months, whereas the term loan would add long term strategic flexibility. Post-closing of the acquisition of Asmodee, Embracer would expect to have more than SEK 9 billion in liquid funds to support investments in organic growth and enable additional acquisitive growth.
Key Rationale
• If the transaction is completed, Asmodee would become the ninth operating group of Embracer, moving Embracer towards becoming a leading independent global gaming eco-system and becoming Europe's largest gaming group.
• Strong strategic and cultural fit between the companies. The combined new group would on pro forma basis have more than 11,300 employees and contracted employees across more than 50 countries. The new group would have 108 own game development studios and more than 560 owned IPs and brands.
• The acquisition adds, immediately accretive to shareholders, approximately 30 percent in forecasted Operational EBIT with approximately 7.5 percent dilution of outstanding shares (based in the number of shares today including the shares that would be issued as part of the purchase price and put option).
• Increased financial scale and diversification of Embracer group. The combined group would have a forecasted Operational EBIT range of SEK 9.0-11.0 billion during FY 22/23 and SEK 9.8-12.9 billion during FY 23/24.
Financial Highlights Asmodee
• Pro forma Net Sales of Asmodee for this calendar year is estimated to be EUR 1.1 billion, Pro forma Adjusted EBITDA EUR 240 million and Pro forma Adjusted Operational EBIT EUR 206 million.
• Forecasted Operational EBIT contribution FY22/23 (March 2023) SEK 2,000-2,500 million and FY 23/24 (March 2024) SEK 2,300-2,900 million. These forecasts exclude further planned M&A.
• The healthy profitability of Asmodee is coupled with solid free cash flow generation, driven by a capex-light business model and efficient working capital management processes. Historically Asmodee has yielded a pre-tax free cash flow conversion of approximately 70-80 percent. The transaction is expected to be immediately accretive to FCF per share.
• Asmodee management expects to have a double digit organic profit growth over the coming five-year period
Asmodee in brief
Asmodee, with its headquarters in Paris, France, was founded in 1995, and is a leading international publisher and distributor for board games, trading cards and digital board games with over 39 million games sold annually in more than 50 countries. Through 22 fully owned studios and 300+ IPs, Asmodee creates a dynamic transmedia experience for players across a variety of digital and physical platforms. Asmodee has a portfolio of 970+ games, of which some of the iconic game titles include Catan, Ticket to Ride, Pandemic, Dixit, Splendor, 7 Wonders, Just One, Dobble/Spot it!, Azul, Unlock!, Bezzerwizzer and Exploding Kittens. Asmodee also establishes licensing and distribution partnership with leading entertainment and technology companies on successful IPs such as Pokémon, Magic: The Gathering, Disney, Harry Potter, Lord of the Rings, Star Wars, Marvel, Dungeons & Dragons and Carcassonne. With a global force of over 2,300 FTEs, Asmodee operates in 50+ jurisdictions across Europe, North America, South America and Asia, of which 21 with direct presence.
Asmodee is to date owned by PAI and certain minority shareholders of Asmodee. Asmodee's CEO Stéphane Carville together with his management team would continue to lead the new operating group. Following completion of the transaction, PAI would hold approximately four percent of the shares in Embracer, and the minority shareholders would hold up to four percent of the shares in Embracer depending on to what extent and at what terms the agreed put and call options would be exercised
Background and Rationale
If the transaction is completed, this would mark a transformative step in Embracer's strategy within gaming and entertainment as outlined at the September AGM:
• Creates Europe's largest gaming group and establishes an important market leading position in board games, a category that is highly complementary to PC, console, VR and mobile games and with appealing long term organic growth outlook.
• Offers the opportunity to cross-fertilise IP and strengthen licensing partnerships across PC, console, VR, mobile, board and trading card games.
• Strong foundation for the future development of transmedia IPs.
• Ability to leverage the omni-channel distribution network to drive efficiencies across existing and new markets.
• Providing a proven platform for value-accretive M&A, complemented by a sizeable funnel for future opportunities within board games, trading card games & collectables.
• Shared strong cultural fit, with a similar integrated model operating across the value chain, from IP through to publishing and distribution.
• Enhancing the new Group's strong financial profile, with added diversity, predictability, resilience, and immediate accretion to adjusted earnings per share and free cash flow per share.
If the acquisition is completed, Embracer would onboard one of the market leading independent global players in a large, growing, highly resilient board gaming market with proven experience of creating long-lasting franchises and delivering strong original content. The acquisition would create Europe's largest gaming group, and would enable collaboration within Embracer in terms of development, publishing, technology, IPs as well as a platform for further M&A. Asmodee would become the ninth operating group, continuing to operate independently.
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