Embracer Group (OTC:THQQF) (DE:TH9), the Swedish gaming giant behind hit titles such as Kingdoms of Amalur and World War Z, plans to split itself into three publicly listed companies.
Embracer’s Value-Unlocking Initiative
Embracer’s move is aimed at unlocking more value for its shareholders. The game developer also owns the rights to Tomb Raider and a suite of products associated with The Lord of the Rings. Under its plan, Embracer will split into three games and entertainment companies: Asmodee Group, Coffee Stain & Friends, and Middle-earth Enterprises & Friends.
Embracer’s Three-Way Split
Furthermore, shares of Asmodee and Coffee Stain will be distributed as a dividend to investors in Embracer. Middle-earth will remain within Embracer, with the latter subsequently being renamed.
While Asmodee will be a tabletop games publisher and distributor, Coffee Stain will be a diverse gaming operation with a focus on indie, premium, and free-to-play games. Finally, Middle-earth will be a leader in game development, big budget games, and will act as a steward of the Lord of the Rings and Tomb Raider IP.
Importantly, the strategy aims to enable the three companies to harness their individual strengths. Additionally, Embracer has entered into a new financing agreement of roughly $959 million to pare down its debt. While Asmodee is expected to list within the next 12 months, Coffee Stain is estimated to list in 2025.
What Is the Future of Embracer Group?
Today’s mega announcement from Embracer comes after a nearly 79% slide in its share price. Overall, the Street has a Hold consensus rating on the game developer, alongside an average THQQF price target of $1.90.
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