Embracer Group acquires Borderlands maker Gearbox Entertainment for $1.3 billion

Borderlands maker Gearbox Entertainment said it is being acquired by the Embracer Group for up to $1.3 billion.

Frisco, Texas-based Gearbox will become a wholly-owned subsidiary of the Karlstad, Sweden-based company. The transaction gives Gearbox access to new capital to help it make more games and become a significant part of the Embracer Group, which has 5,500 employees around the world.

Now it is adding Gearbox’s team of 550 in Frisco, Texas, and Quebec City, Canada, to its roster. Gearbox will become Embracer Group’s seventh operating group. Embracer Group made headlines in November when its buying spree exploded; the company announced it had acquired 12 game studios and a PR firm in a single day.

Over the years, Gearbox has worked on the Borderlands and Brothers in Arms franchises and it helped with the development of Half-Life, Counter-Strike, Tony Hawk’s Pro Skater, 007 James Bond, and Halo.

“Lars’s vision of Embracer as an allied partner group committed to fueling and accelerating the ambitions of a series of decentralized, successful entrepreneurial companies while magnifying the collective value and advantages of diversification across the entire group is the most brilliant strategy and design for short, medium, and long-term success in this industry that I have ever encountered in my 30 years in this industry,” said Randy Pitchford, founder of Gearbox, in a statement. “The feeling at Gearbox is that we are just getting started and this transaction is not merely a stimulant for the talent of our employee-owned company, but a propellent for the exciting future we have planned.”

Above: Randy Pitchford cofounded Gearbox Software in 1999.

Image Credit: Gearbox Software

The Gearbox team has developed and engaged a plan for immediate and long-term growth that includes the expansion of talent at both studios, the creation of new Gearbox studios, and expanded partnerships. This merger enables Gearbox to do more with its existing brands, create new brands, and, potentially, undertake the merger and acquisition of other successful industry and industry-adjacent entities and properties.

“Gearbox is arguably one of the most creative and valuable independent developers in the world,” said Lars Wingefors, founder and CEO of Embracer Group, in a statement. “We believe that the resources offered by Embracer will position Gearbox for significant growth in the years to come.”

Borderlands 3's Steam launch comes with crossplay between Epic's and Valve's platforms.

Above: Borderlands 3

Image Credit: Gearbox Software

Gearbox confirmed that Pitchford will continue in his current role as head of Gearbox. Juno Capital Partners and Union Square Advisors  acted as M&A and financial advisors to Gearbox on this transaction and Fenwick & West acted as legal counsel.

Embracer Group is the parent company of game businesses with a catalog of over 200 owned franchises, such as Saints Row, Goat Simulator, Dead Island, Darksiders, Metro, MX vs ATV, Kingdoms of Amalur, TimeSplitters, Satisfactory, Wreckfest, Insurgency, and World War Z, amongst many others.

Embracer Group’s other groups include THQ Nordic GmbH, Koch Media GmbH/Deep Silver, Coffee Stain AB, Amplifier Game Invest, Saber Interactive, and Deca Games. Embracer Group has 57 internal game development studios in 40 countries.

In another deal, Embracer Group has also acquired Cyprus-based Easybrain for $640 million in cash, plus another $125 million as a possible bonus.

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