Asmodee’s owner loads it up with €900m debt amid plan to spin off board game giant, CEO Carville to be replaced

Asmodee’s troubled corporate owner Embracer Group has revealed plans to spin off the tabletop gaming giant, which will see the business take on the vast majority of its parent company’s hefty debt pile.

Embracer will load up Asmodee with €900m of debt as part of the separation in order to pay down borrowing across the rest of its operations, which includes a suite of PC game studios and the worldwide rights to the Lord of the Rings and The Hobbit.

Embracer was primarily a video games-focused company before buying Asmodee in a €2.75bn deal in 2021, as part of a years-long acquisition spree aimed at creating a major entertainment conglomerate.

That plan, fuelled by years of cheap borrowing costs prior to the Covid-19 pandemic, fell apart in May 2023 after an expected $2bn investment from Saudi Arabian government-backed Savvy Games Group fell through.

Embracer was left with debt of more than $2bn, causing it to launch a huge restructuring program a month later which saw it lay off about 1,400 people, shutter a string of video game studios and sell off big-name assets including Borderlands publisher Gearbox Interactive.

Asmodee has remained something of a jewel in the crown of its troubled owner throughout the restructuring, having already become Embracer’s biggest earner after overtaking its PC and Console Games segment for net sales.

The company avoided large-scale job losses during the process, with numbers released in February showing its internal headcount fallen by just 82, to 2,500 people, since Embracer began restructuring last summer.

BoardGameWire predicted last month that the tabletop group’s strong performance had potentially put it in the shop window to help Embracer pay down its debt, with Embracer CEO Lars Wingefors saying at the time that Asmodee was “one of the absolute most important businesses we have”.

Asmodee will be spun off within the next 12 months through a separate stock market listing on the Stockholm bourse, with Embracer saying the move will allow the board game company to better focus on its core strategy and markets, as well as “quickly resume its value accretive M&A strategy”.

Shares of Asmodee will be distributed as a dividend to the shareholders of Embracer Group as part of the listing, while the largest shareholder, Wingefors, said he will remain a long-term, active, committed and supportive owner.

Shareholders representing more than 50% of the capital and votes in Embracer Group have expressed support for the transformation plan.

Embracer added that Asmodee CEO Stéphane Carville will be replaced by current deputy COO Thomas Koegler “in the coming months”.

The spin-out and debt refinancing will see Asmodee’s debt reach 3.9x its adjusted earnings, compared to just 0.6x for the remainder of Embracer following the split.

Embracer CEO Wingefors told a press conference following the announcement that Asmodee would be able to handle the new debt burden.

He said, “Asmodee is a very established business with a very long track record. They have carried up to or even more than 5x leverage under their private ownership from private equity under many years. It’s a well known asset by many leading European banks and obviously they have done their homework on this.

“I feel, as they do, confident in Asmodee’s ability to deliver stable cash flows going forward. If you look at the cash flows from Asmodee over more years than the two years we’ve been owning them, it has been very stable.”

He added in a press release accompanying the announcement, “This move has been made with the intention to unleash the full potential of each team and provide them with their own leadership and strategic direction.

“This is the start of a new chapter, a chapter that I intend to remain part of as an active, committed, and supportive shareholder of all three new entities, with an evergreen horizon.”

Asmodee distributes trading card games such as Pokemon, Magic, Yu-Gi-Oh!, as well as publishing board games under 22 subsidiaries including Catan Studio, Days of Wonder, Fantasy Flight Games, Lookout Games and Z-Men Games.

Its biggest IPs include Ticket to Ride, Catan, Splendor, 7 Wonders, Azul, Exploding Kittens, Dobble/Spot It! and Star Wars: Legion.


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