THQ Nordic raises $161 million for new studio and IP acquisitions

The Embracer Group (aka THQ Nordic) already owns 163 IPs across 92 studios, but it's still hungry for more.

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The Embracer Group might own more IPs than any other games company on the market today.The company has bought up a ton of IPs and studios, from Deep Silver's entire catalog under Koch Media (Saints Row, Metro, Dead Island) to yesteryear franchises like Kingdoms of Amalur, Timesplitters, and even Gothic.

But that acquisition spreed is far from over. Embracer is looking to grow, and it just got a big $161 million financing surge via a new share issue. Over 100 investors bought into the share issue so Embracer could "continue our buy-to-build M&A journey."

"After the close of the quarter, we improved our financial position further and strengthened our M&A capacity by a new share issue, raising SEK 1,646.5 million," Embracer CEO Lars Wingefors said in an earnings report.

"I was pleased to see strong demand from both new and existing long-term shareholders. This enables us to continue our long track-record of acquisitions of new game publishers, development studios or new exciting franchises."

"Our M&A strategy retains a strong pipeline of possibilities. The appetite among gaming entrepreneurs for joining forces is solid and growing. Currently we are involved in several ongoing discussions which could lead to future acquisitions, including a handful groups of sizable companies that could form new operative groups."

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Read Also: THQ Nordic label earnings up 51% on strong game sales

Embracer is currently courting a number of unmentioned studios and watching games and IPs very closely.

Right now Embracer has a lot on its plate.

The company is developing 118 games right now, and 69 of them haven't been revealed. Many of these games are new IPs as well as sequels in established franchises. It employs over 3,000 people across 92 development teams across the globe.

Embracer added three new studios to its team in FY20:

1. Saber Interactive
2. Gothic-remake studio in Barcelona
3. Nine Rock Games in Bratislava, who swiftly have built up an experienced team of 40+ people, working on an unannounced new IP

Also it's pretty expensive having all of these games in development.

The longer a game is in dev, the more it costs in the long run, in both lost perceived IP rights value and overall development funding/spending. Embracer's total depreciation and amortization earnings jumped YoY thanks to the increase in new IPs, new games, and the delay of Saints Row V to 2021.

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