Exclusive: Swedish company Embracer is considering the options available to Borderlands maker Gearbox Entertainment

LONDON (Reuters) – Embracer (EMBRACb.ST) is considering options for U.S. game developer Gearbox Entertainment, including a sale, as Europe’s largest gaming company looks to shore up its finances, three people familiar with the matter told Reuters.

The maker of the new Tomb Raider video game, whose shares are traded in Stockholm, is working with Goldman Sachs and Aream & Co. to explore a sale, the people said. Last year, Embracer purchased several development studios and the intellectual property rights to a number of games, including the new Tomb Raider game.

Embracer is considering selling the unit, known for the first-person shooter Borderlands, after receiving interest from third parties, two of the people said.

Officials from Embracer and Goldman Sachs declined to comment. Aream did not respond to requests for comment.

⁠Embracer shares turned positive and rose as much as 5% on the news, closing at SEK27.40 on Monday.

In June, Embracer announced a restructuring to reduce its net debt to less than 10 billion Swedish krona ($903 million) by the end of its fiscal year from 16.7 billion Swedish krona at the end of June. The plans, which include closing studios, canceling projects and laying off workers, come on the heels of what CEO Lars Wingfors described as a “challenging year” for the company.

Embracer, whose founder Wingefors is majority owned, bought Gearbox in February 2021 in a deal that valued the company at up to $1.4 billion at the time.

Marketing materials for Gearbox are already available to potential buyers, who mainly consist of international gaming groups, two of the people said.

The sources, who requested anonymity because the matter is confidential, warned of the possibility of not reaching an agreement.

Gearbox, which falls under Embracer’s PC gaming division, published its latest title Remnant 2 last month, which topped the US charts for July.

Embracer, which has a catalog of more than 900 franchises owned, announced a review of its business to weather difficult economic conditions last November, which could lead to a spin-off of units.

In May, Embracer said it had reached a verbal commitment with an undisclosed party last October that would have resulted in more than $2 billion in “contracted development revenue” over six years. However, in the last hour, it said it had “received a negative outcome from the counterparty,” sending its shares down more than 40%.

($1 = 11.0786 Swedish krona)

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