Gearbox Bought By Embracer! Why The Top Line Price Is Misleading (VL 407)

Borderlands developer Gearbox has joined the game company acquisition parade, selling to Embracer Group for what some have reported as $1.3B+. But if that number sounds a bit high to you, you're not alone.

Today we turn to the fun-filled world of mergers and acquisitions to talk about merger structure, cash vs stock, and conditional payments (earn-outs). It's going to be a fun one.

Let's dive in.

Earn-outs are really their own kind of magic trick...in Virtual Legality.

CHECK OUT THE VIDEO AT: https://youtu.be/E1KqS4VGqEc

#Gearbox #Embracer #Acquisition

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CHAPTERS
00:00 Introduction
00:56 The Headline Price
08:28 Randy Pitchford and Gearbox Independence
14:13 The Embracer Investment Release
21:40 Borderlands and 2K
28:04 Doing the Math (Earn-Outs)
35:31 Conclusion

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Discussed in this episode:

"Embracer Group acquires Borderlands maker Gearbox Entertainment for $1.3 billion"
VentureBeat - February 2, 2021
https://venturebeat.com/2021/02/02/embracer-group-acquires-borderlands-maker-gearbox-entertainment-for-1-3-billion/

"Embracer Group acquires 12 game studios and a PR firm (updated)"
VentureBeat - November 17, 2021
https://venturebeat.com/2020/11/17/embracer-group-acquires-10-game-studios-and-a-pr-firm/

"EMBRACER GROUP MERGES WITH THE GEARBOX ENTERTAINMENT COMPANY AND FORM A SEVENTH OPERATING GROUP"
Embracer Group Investor Release
https://embracer.com/release/embracer-group-merges-with-the-gearbox-entertainment-company-and-form-a-seventh-operating-group/

"Gearbox says it will continue to work with 2K on Borderlands after its sale"
VGC - February 3, 2021
https://www.videogameschronicle.com/news/gearbox-says-it-will-continue-to-work-with-2k-on-borderlands-after-its-sale/

"A Lawyer Reads...A Game Publishing Agreement! (Part II: Delivery) (VL383)"
YouTube Video - January 7, 2021 - Hoeg Law
https://youtu.be/NQ3fMkm6UJs

"Streamers are right to be concerned about the games industry’s video policies"
VGC - February 2, 2021 - Hoeg Law
https://www.videogameschronicle.com/features/opinion/streamers-are-right-to-be-worried-about-the-games-industrys-video-policies/

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"Virtual Legality" is a continuing series discussing the law, video games, software, and everything digital, hosted by Richard Hoeg, of the Hoeg Law Business Law Firm (Hoeg Law).

CHECK OUT THE REST OF VIRTUAL LEGALITY HERE:
https://www.youtube.com/playlist?list=PL1zDCgJzZUy9YAU61GoW-00K0TJOGnPCo

DISCUSSION IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TO BE CONSTRUED AS LEGAL ADVICE. INDIVIDUALS INTERESTED IN THE LEGAL TOPICS DISCUSSED IN THIS VIDEO SHOULD CONSULT WITH THEIR OWN COUNSEL.

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Twitter: @hoeglaw
Web: hoeglaw.com