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Embracer’s acquisition spree takes it to top of European games business



By Supantha Mukherjee

KARLSTAD, Sweden (Reuters) – In a quiet corner of the town of Karlstad, 300 kilometres from Stockholm, a Swedish entrepreneur has built Europe’s largest gaming company by market value – although most gamers have never likely heard of it.

Working out of an unassuming apartment building, Lars Wingefors’ Embracer Group, with a team of fewer than 20, has grown by acquisition. Its catalogue already includes games as diverse as survival game Valheim, racing game MX vs ATV, and Goat Simulator.

And Embracer, which has bought more than a dozen companies during the coronavirus pandemic alone, is not done yet, Wingefors told Reuters in a recent interview.

Many gaming companies prospered during the pandemic as people locked in their homes turned to their screens. Embracer did even better than most, with its market capitalization more than doubling in the last 12 months to over $11 billion, compared with $10 billion for France’s Ubisoft and $5 billion for Poland’s CD Projekt.

Since going public in 2016 at 20 krona per share, Embracer’s shares have climbed, reaching 260 krona by this week.

Wingefors attributes Embracer’s success to a unique model under which he allows founders to run their companies as independent businesses, or “verticals,” after they are acquired by Embracer, with full creative and operational freedom.

It’s an approach that could have broad appeal in the fast-changing, hit-driven gaming business – which, ironically, analysts cite as a risk for Embracer because too many imitators could push up the cost of acquisitions. Deep-pocketed companies such as Microsoft could be willing to pay a premium for gaming firms.

The decentralized structure can also make it difficult for the company to take on the biggest gaming projects and compete with the likes of Electronic Arts and Activision, according to analysts and gaming industry executives.

Still, Wingefors has done a good job incentivising the many studios to pull in the same direction, said Benjamin May, an analyst with Berenberg.

Embracer currently has eight verticals, and is looking to add at least two new ones every year.

“We are working on more deals than ever across all our verticals, and I still have billions left,” he said in an interview in his office, where the walls are adorned by large paintings, framed stock certificates of old Swedish companies and covers of comic book first editions.

“Right now we are busy trying to consolidate Europe, Russia, and starting to put our foot on the ground in Canada and North America.” COMICS TO GAMES

Wingefors started his first business at 13, buying and selling comic books. He learned the value and year of release of about 50,000 comic books printed in Sweden.

“It gave me a big advantage when buying comic books as I immediately could understand the value of each potential deal,” Wingefors said.

Soon he started selling used video games by mail order, eventually selling the business to British dotcom startup Gameplay for 8 million pounds in a stock deal in March 2000, at the height of the dotcom bubble.

He became part of the company’s European management, before moving on to found Nordic Games in 2008. The company listed on the secondary market in Stockholm in 2016 and rebranded itself as Embracer in 2019.

This year’s acquisitions included Gearbox, known for first person shooter Borderlands, in a deal valued at up to $1.36 billion.

“Lars has a very rare balance of intelligence, ambition and humility,” said Gearbox CEO Randy Pitchford, who said he was initially not interested in Embracer but changed his view after meeting Wingefors.

Embracer now has 193 game projects under development.

“We are expecting to complete 70 games projects in the next financial year and there are games costing at least $50 million in the pipeline,” Wingefors said.

Embracer’s deals usually include upfront cash, a stake in the company and milestone payments based on game releases. The company has raised money through share sales to fund the deals, including nearly $1 billion last month.

That model likely “decreases the risk of bad acquisitions compared to other M&A-intense gaming companies,” said Pareto Securities analyst Marlon Värnik.

Currently listed on Nasdaq First, Embracer hopes to list on the main bourses in the next few years.

“In the next five years to 10 years I want to build something substantially bigger than what we are today,” Wingefors said.


(Reporting by Supantha Mukherjee in Stockholm. Editing by Jonathan Weber and Rosalba O’Brien)

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Djokovic outlasts Sonego to set up Rome final with Nadal



Defending champion Novak Djokovic and Rafa Nadal will clash for the Italian Open title after the top two seeds advanced to the final of the Masters tournament on Saturday.

Djokovic, who beat Greek Stefanos Tsitsipas 4-6 7-5 7-5 in a rain-delayed quarter-final earlier in the day, was also stretched to three sets in the semi-final before overcoming local favourite Lorenzo Sonego.

Sonego, the first Italian to make the semi-finals in Rome in 14 years after he beat world number seven Andrey Rublev earlier on Saturday, had his dream run ended by Djokovic who triumphed 6-3 6-7(5) 6-2.

Djokovic failed to convert two match points in the second set that lasted 91 minutes as Sonego forced a tiebreak, where the Serb lost a 4-2 lead.

However, the world number one controlled proceedings in the decider and advanced after Sonego’s return on match point found the net.

Earlier, Nadal beat Reilly Opelka 6-4 6-4 to move into the final in Rome for the 12th time.

The match was Nadal’s 500th on clay where he has a formidable 458-42 record and the Spaniard advanced after twice breaking the big-serving American.

“When you play these kind of matches, you know it’s not going to be a beautiful match… you’re not going to find rhythm in the match. You’re going to have just a few chances to break,” Nadal told reporters.

“It’s important not to suffer much with your serve because if you are… you feel the stress all the time. So the positive thing today, I just faced break points in one game during the whole match.”

Djokovic was trailing Tsitsipas 6-4 2-1 when Friday’s quarter-final was halted by rain but the Serb raised his game at key moments to twice come back from a break down in the deciding set.

Djokovic has a 29-27 career record against Nadal but the Spaniard has won five of their eight matches in Rome.

(Reporting by Rohith Nair in Bengaluru and Sudipto Ganguly in Berhampore, India; Editing by Hugh Lawson and Ed Osmond)

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New York Rangers get OK to interview Gerard Gallant for coaching job



The New York Rangers plan to interview Gerard Gallant for their head coaching job, TSN reported.

The Vegas Golden Knights, who fired Gallant during the 2019-20 season, reportedly have granted permission.

A first conversation between the Rangers and Gallant was expected to take place quickly, before Gallant heads to Latvia to coach Team Canada at the IIHF World Championship, which runs from May 21-June 6.

Gallant, 57, was the first coach of the expansion Golden Knights and led them to the Stanley Cup Final in their inaugural season in 2017-18. The Washington Capitals won in five games.

He was fired 49 games into his third season when the team was 24-19-6, and he had an overall record of 118-75-20 with Vegas.

He also coached the Columbus Blue Jackets (2003-07) and Florida Panthers (2014-17) and has a career record of 270-216-4-51 in 541 career games as a head coach.

The Rangers are in the midst of an overhaul. They fired head coach David Quinn and three assistant coaches on Wednesday, following the dismissal last week of team president John Davidson and general manager Jeff Gorton.

The Rangers failed to qualify for the playoffs for the fourth straight season after posting a 27-23-6 record in 2020-21. They finished in fifth place in the East Division.

Quinn, 54, compiled a 96-87-25 record during his three seasons as coach of the Rangers after taking over for Alain Vigneault on May 23, 2018.

–Field Level Media

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NHL wants answer on Canada border crossing soon



The NHL has asked the Canadian government for a decision by June 1 about U.S. teams crossing the border during the Stanley Cup Playoffs, ESPN reported Friday.


The Canadian teams played only each other during the 2020-21 season in a revamped North Division because of the COVID-19 pandemic, and that will continue during the first two rounds of the playoffs. It’s what happens after that — in the semifinals and finals — that is up in the air.


“The conversations are ongoing. We’ve told them we really do need to know by the end of the first round, and that’s around June 1,” Steve Mayer, the league’s chief content officer, told ESPN. “That’s pretty much the date that we’ve talked to them about, saying we have to know one way or another.”


Last season, the playoffs were held in bubbles in Edmonton and Toronto.


Under current rules, American-based teams couldn’t play in Canada without mandatory quarantines, which would make travel for home-and-away games impossible under the playoff calendar.


The NHL and government representatives last talked a week ago, and the Canadian officials submitted a variety of questions for the league’s response.


In the interim, Mayer said, the league has discussed the possibility of the Canadian team that advances from the North Division being based in the U.S. for the duration of the postseason. Talks have occurred with officials at NHL arenas where teams didn’t qualify for the playoffs.


An NHL source told ESPN this week that the league expects “a positive resolution” to the issue, however.


–Field Level Media

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