What just happened? Take-Two Interactive has agreed to purchase Gearbox Entertainment from the Embracer Group for $460 million. The deal includes the full rights to several Gearbox franchises including Borderlands, Tiny Tina's Wonderlands, Risk of Rain, Homeworld, Duke Nukem, and Brothers in Arms.
Take-Two said Gearbox currently has half a dozen projects in various stages of development including five sequels (two of which are from Borderlands and Homeworld) and one title based on entirely new IP.
Per the agreement, Embracer Group will retain Gearbox Publishing (which will be renamed) and the publishing rights to the Remnant franchise, Hyper Light Breaker, and others, as well as Lost Boys Interactive, Captured Dimensions, and Cryptic Studios (including Neverwinter Online and Star Trek Online).
Gearbox will slot into Take-Two's 2K division, and be led by Gearbox co-founder Randy Pitchford and his team. Pitchford said he is excited about what the two can accomplish together "now that we're fully aligned as one."
Pitchford, one of five co-founders, helped start Gearbox in 1999 and served as president and CEO. The studio helped create several games in the Half-Life franchise and acquired the rights to Duke Nukem in 2010, but is arguably best known for its original franchises, Brothers in Arms and Borderlands.
David Ismailer, president of 2K, confirmed that a new installation in the Borderland series is in active development.
Take-Two said the purchase will be funded entirely by newly issued shares of common stock. To determine how many shares to mint, the company will divide the purchase price by the average closing price per share in the five days leading up to the deal's closing.
Embracer Group plans to use the sale to reduce net debt, lower cash earnout obligations, and cut down on capital expenditures.
Gearbox and Take-Two have a longstanding working relationship. Take-Two has published several Gearbox titles over the years, dating back to the first Borderlands game in 2009 and including Duke Nukem Forever in 2011.
The deal is expected to close by the end of June, pending customary regulatory approval.