UPDATE 1-Embracer to buy U.S games developer Saber Interactive for up to $525 mln

mln@ (Adds shares, background, detail, analyst comment)

STOCKHOLM, Feb 19 (Reuters) – Shares in Embracer soared on Wednesday after the Swedish video game group said it was buying U.S. game developer Saber Interactive for up to $525 million and reported a sharp rise in quarterly core earnings.

Embracer shares climbed 22% by 0952 GMT, taking year-to-date gains to 54%.

Embracer said it would pay $150 million initially for Saber, the maker of games such as World War Z, in a mix of cash and Embracer stock.

After that, it would pay an earn-out consideration of a maximum $375 million, “subject to fulfillment of agreed milestones,” also in a mix of cash and shares.

“Saber has been on our radar for a very long time because of their deep history of consistently high-quality work,” Embracer CEO Lars Wingefors said in a statement.

Saber has more than 600 staff and made an operating profit of $62 million in 2019 on revenues of $105 million.

Handelsbanken Capital Markets said the purchase price for Saber was at a 20% lower earnings multiple than Embracer’s own.

Embracer, founded by Wingefors, who is also the main owner, has been a stock market darling, rising more 700% in the past three years, boosted by a stream of game studio acquisitions.

Embracer also reported that earnings before interest, tax, depreciation and amortization (EBITDA) rose 59% to 518 million Swedish crowns ($53 million) in the October-December quarter.

Analysts had expected an EBITDA of 473 million, according to data from Refinitiv.

Analysts at Handelsbanken said Embracer’s fiscal third-quarter results were better than expected and said the next fiscal year was expected to be very strong. ($1 = 9.7794 Swedish crowns) (Reporting by Johannes Hellstrom; Editing by Simon Johnson and Edmund Blair)

Source: https://www.cnbc.com/2020/02/19/reuters-america-update-1-embracer-to-buy-u-s-games-developer-saber-interactive-for-up-to-525-mln.html

You may like

In the news
Load More