Take-Two Interactive Software, one of the largest interactive entertainment companies in the world, announced that it has entered into a definitive agreement with Embracer Group to acquire The Gearbox Entertainment Company for $460 million. The consideration consists entirely of newly issued shares of Take-Two common stock.
The number of Take-Two shares will be based on dividing the purchase price by the average closing price per share on the Nasdaq during the five-trading day period ending on the trading day immediately before the closing date. And the purchase price assumes a debt-free, cash-free company with a normalized net working capital (excluding cash) at the time of the closing of the acquisition.
Take-Two expects the deal to deepen its successful relationship with Gearbox Entertainment and provide increased financial benefits through a fully integrated operational structure. It will also acquire Gearbox’s extensive portfolio of intellectual property, including full ownership of the Borderlands and Tiny Tina’s Wonderlands franchises, Homeworld, Risk of Rain, Brothers in Arms, Duke Nukem, and Gearbox’s future pipeline.
Gearbox has six key interactive entertainment projects in various stages of development, including five sequels, two of which are from the Borderlands and Homeworld franchises, and at least one exciting new intellectual property. Beyond these plans, Take-Two believes there are incremental opportunities to invest in new projects and expand Gearbox’s proven franchises.
Gearbox will operate as a studio within 2K and be led by founder and CEO Randy Pitchford and his management team. The acquisition adds a robust and proven development team to 2K’s incredibly talented developer community, including personnel who have worked together on multiple critically and commercially successful games. Gearbox operates studios in Frisco, Texas; Montreal, Canada; and Quebec City, Canada.
The deal is expected to be completed during the first quarter of Take-Two’s Fiscal Year 2025 (ended June 30, 2024). It is subject to the satisfaction of customary closing conditions, including applicable regulatory approvals. The transaction excludes certain third-party publishing and other assets that Take-Two deemed non-core to its business.
Willkie Farr & Gallagher LLP is providing legal counsel to Take-Two, and KPMG and Deloitte are providing advice on financial and tax matters.
KEY QUOTES:
“Our acquisition of Gearbox is an exciting moment for Take-Two and will strengthen our industry-leading creative talent and portfolio of owned intellectual property, including the iconic Borderlands franchise. This combination enhances the financial profile of our existing projects with Gearbox and unlocks the opportunity for us to drive increased long-term growth by leveraging the full resources of Take-Two across all of Gearbox’s exciting initiatives.”
- Strauss Zelnick, Chairman and CEO of Take-Two
“With nearly 20 years of history working together, Gearbox has played an integral role in our success, given their unique ability to create interactive entertainment experiences that feature beloved characters, exciting new worlds, and humorous storytelling. We are thrilled to welcome Randy Pitchford and his team of passionate, talented developers to 2K and we look forward to releasing numerous projects in the future as colleagues. We have loved partnering with Gearbox on every iteration of the Borderlands franchise and are excited to be in active development on the next installment in the series.”
- David Ismailer, President of 2K
“Joining forces with Take-Two Interactive and 2K will help Gearbox ascend to our next level. Take-Two and 2K have demonstrated repeatedly their commitment to our engine of generating creativity, happiness, and profit. We set the bar for interactive entertainment and achieved remarkable results with groundbreaking, record-setting games when we worked together at arm’s length as partners. I’m incredibly excited about what we can accomplish now that we’re fully aligned as one.”
- Randy Pitchford, Founder and CEO of Gearbox Entertainment
