Ticket to Ride and Catan maker granted freedom from Embracer along with €900m of former owner’s debt

Asmodee, the giant board game company behind Catan, Ticket to Ride and Exploding Kittens, has been spun off from corporate owner Embracer Group in a larger move that effectively trisects the beleaguered Swedish holding corporation and leaves Asmodee holding €900 million of new debt.

Advertised as a “transformative step for value creation” by Embracer’s press release, the dissolution will create three business entities that will be separately and publicly traded on Nasdaq Stockholm, the country’s stock exchange. Embracer claims that such a plan will “enable the entities to unlock value in [their] high-quality assets” while owner Lars Wingesfors stays on as the largest shareholder and leader of a new ownership structure (he will control 20% of the total capital and 40% of votes).

Along with Asmodee Group, Embracer’s suite of independent and video game studios will be collected under the strangely named “Coffee Stain & Friends” - referencing the Goat Simulator and Satisfactory developer - while the licence for The Lord of the Rings joins Crystal Dynamics’ Tomb Raider franchise (which has its own taletop RPG adaptation in the works), comics label Dark Horse and several other miscellaneous holdings as “Middle-earth Enterprises & Friends”.

“With this new structure, the three entities will be able to focus on executing their core strategies and leveraging their own strengths, providing more differentiated and distinct equity stories to both existing and new shareholders,” said Kicki Wallje-Lund, Embracer Group’s chair of the board. “After careful evaluation of various strategic alternatives, we strongly believe that this decision will benefit all stakeholders and position us for continued success in the future.”

Asmodee will no longer be directly affiliated with Embracer’s soured public image after it laid off over 1,400 people during its six months of restructuring meant to eat a chunk of $2 billion worth of debt after a deal with Saudi Arabian investors fell through in 2023. It will hold the €900 million bag that Embracer accrued via a financing agreement with JP Morgan, BNP Paribas, SEB, Societe Generale and Swedbank. According to a press release, the loan is secured only by Asmodee assets and will be used to refinance Embracer’s existing SEK 8 billion loan. The corporation previously sold off Saber Interactive and Gearbox Entertainment in order to eat away at that mind-boggling number.

Wingefors previously called Asmodee “one of the absolute most important businesses” in Embracer’s broad portfolio after it was acquired (colloquially referred to as “being Embraced”) in 2022. Asmodee did not lose a significant number of staff during the last several months of layoffs and divestments, but this feels like a damnation of a different flavour. The board game publisher maintains 23 smaller companies of its own, shipping both popular titles and hobby-level hits worldwide. Asmodee posted a record SEK 12.1 billion in sales through 2023, meaning Embracer’s debt albatross may not be immediately back-breaking but puts the board game company in a perilous position if global shipping or material prices spike again.

“This move has been made with the intention to unleash the full potential of each team and provide them with their own leadership and strategic direction,” Wingefors said. “This is the start of a new chapter, a chapter that I intend to remain part of as an active, committed, and supportive shareholder of all three new entities, with an evergreen horizon. This move towards three independent companies reinforces Embracer’s vision of backing entrepreneurs and creators with a long-term mindset, allowing them to continue to deliver unforgettable experiences for gamers and fans across the globe.”

Embracer hopes that opening Asmodee to Nasdaq Stockholm will allow the company to focus on its best-selling products and brand portfolio, which also include board games such as the new Star Wars: Unlimited TCG, 7 Wonders, Azul and Dobble. Each of the three extant businesses will still engage in “transmedia collaboration”, and Middle-earth Enterprises was specifically named as a high-value partner for such dealings.

Asmodee’s corporate headquarters will remain in France, and both current CEO and COO Stéphane Carville and Marc Nunes, respectively, will join the company’s board of directors. Carville will also be appointed the Embracer’s executive management team. Dicebreaker has reached out to Asmodee for comment and what their plan for handling the massive debt “gift” might be going forward.