Saudi fund PIF makes second billion dollar bet on Swedish games
The Saudi wealth fund has made its second billion dollar foray into the Swedish gaming industry this year as part of a campaign to boost stakes in video game makers and esports companies to worldwide.
The Public Investment Fund’s Savvy Gaming Group will become the second largest owner of Embracer Group AB after acquiring nearly 100 million shares in the Karlstad-based company.
The move follows a similarly sized acquisition in January, when Savvy bought Modern Times Group’s esports division for an enterprise value of $1.05 billion.
The PIF, as the $500 billion fund is known, continues to deepen its push into a gaming industry that continues to consolidate. Last month, the fund took a 5.01% stake in Nintendo Co., marking its third investment in a Japanese games company.
News of a rights issue directly to Savvy sent Embracer shares up nearly 10% in early trading in Stockholm on Wednesday.
As a result of the deal, PIF will take an 8.1% stake in the Swedish company for 10.3 billion crowns ($1.05 billion). The price of 103.47 crowns per share represents a premium of 15% compared to the closing price on June 7.
Embracer said last month it was in talks with potential long-term strategic investors. A rapid pace of acquisitions has helped the company become one of Europe’s biggest gaming companies, and it is currently considering heading to the main market of Nasdaq Stockholm to help broaden the investor base.
The relationship with Savvy will allow Embracer to create a regional hub in Saudi Arabia from which it can invest in the region, Embracer CEO Lars Wingefors said in a statement. The proceeds from the share issue will be used to pursue its acquisition strategy.
Read more: Saudi PIF adds to gaming push with 5% stake in Nintendo