Signature of a share transfer agreement with modification of the subsidiaries (sale of Select Overseas Studios & IP) | Nation/World

TOKYO–(BUSINESS WIRE)–May 2, 2022–

SQUARE ENIX HOLDINGS CO., LTD. (the “Company”) today signed a share transfer agreement with Sweden-based Embracer Group AB regarding the divestiture of certain foreign studios and intellectual property (the “Transaction”). The principal assets of the Company to be transferred in connection with the Transaction are group subsidiaries such as CRYSTAL DYNAMICS, INC. ; EIDOS INTERACTIVE CORP. and IP such as GRAVE Raider, Deus Ex, Thiefand Kain’s Legacy. At the meeting of the company’s board of directors held on April 27, 2022, the board decided to entrust the director representing Yosuke Matsuda with the right of final decision. All the conditions having been met, the share transfer agreement was concluded today.

1. Purpose of the Transaction

The transaction will help the Company adapt to the ongoing changes in the global business environment by establishing a more efficient allocation of resources, which will improve business value by accelerating the growth of the Company’s core businesses in the field. digital entertainment. In addition, the transaction enables the launch of new businesses by continuing investments in areas such as blockchain, AI and cloud. This decision is based on the commercial structure optimization policy that the Company has defined as part of the medium-term commercial strategy unveiled on May 13, 2021.

The transaction will also be an opportunity to better align our overseas publishing function with our organization in Tokyo, review the current governance structure and associated reporting lines, and advance the integrated management of the group in the goal of maximizing global revenue generated from future titles released by the group’s studios in Japan and overseas.

Going forward, the company’s development function will include its studios in Japan, Square Enix External Studios and Square Enix Collective. The Company’s overseas studios will continue to release franchises such as RIGHT CAUSE, OUTRIDERS, and life is strange.

2.

Main companies, intellectual property to be assigned

a.

Main companies to be sold

(1)

Company Name

CRYSTAL DYNAMICS, INC.

(2)

The head office

1400A Seaport Boulevard, Suite 300 Redwood City, California 94063 USA

(3)

Name and title of representative

Rogers Philip Timo, Director

(4)

activity Descrition

Planning and development of entertainment products

(5)

Stated capital

$40 million

(6)

Established

July 8, 1992

(7)

Main shareholder and shareholding ratio

Eidos, Inc., 100%

(8)

Relations between the parties

capital relationship

The Company indirectly owns 100% of the outstanding shares of Crystal Dynamics, Inc.

personal relationship

Not applicable

Business relationship

Plans and develops content for publication by group subsidiaries

Applicability to related parties

Crystal Dynamics, Inc. is a third generation subsidiary of the Company.

(9)

Commercial and financial performance over the last three years (in thousands of dollars)

Fiscal year

March 2019

March 2020

March 2021

Total equity

(144)

2,410

5,750

Total assets

19,000

17,927

22,889

Equity per share (USD$)

(1.44)

24.10

57.50

Revenue

66,923

81 144

92,277

Operating result

2,856

3,465

3,876

Ordinary income

2,202

2,681

3,592

Net revenue

2,148

2,554

3,340

Earnings per share

(USD$)

9:48 p.m.

25.54

33.40

Divide by share

(USD$)

(1)

Company Name

EIDOS INTERACTIVE CORP.

(2)

Location

400 De Maisonneuve Boulevard West, 6th floor, Montreal QC H3A 1L4, Canada

(3)

Name and title of representative

Rogers Philip Timo, Director

(4)

activity Descrition

Planning and development of entertainment products

(Development studios: Eidos-Montreal, Square Enix Montreal)

(5)

Stated capital

6.2 million Canadian dollars

(6)

Established

March 5, 2007

(7)

Main shareholder and shareholding ratio

Square Enix Ltd., 100%

(8)

Relations between the parties

capital relationship

The Company indirectly owns 100% of the outstanding shares of Eidos Interactive Corp.

personal relationship

Not applicable

Business relationship

Plans and develops content for publication by group subsidiaries.

Applicability to related parties

EIDOS INTERACTIVE CORP. is a second generation subsidiary of the Company.

(9)

Business and financial performance over the last three years (in thousands of Canadian dollars)

Fiscal year

March 2019

March 2020

March 2021

Total equity

28,491

29,550

30 198

Total assets

64,841

96,484

88,373

Equity per share (CAN$)

45.95

47.66

48.71

Revenue

73 203

75,635

99,857

Operating result

2,963

3,270

4,079

Ordinary income

3,112

1,954

3,072

Net revenue

5,318

1,059

647

Earnings per share

(CAN$)

8.58

1.71

1.04

Divide by share

(CAN$)

b.

Main IP to give away

GRAVE Raider, Deus Ex, Thiefand Kain’s Legacy franchisees, among others

3.

Profile of the counterparty to the Stock Transfer

(1)

Company Name

Embracer Group AB

(2)

The head office

Alvgatan 1 Karlstad Sweden

(3)

Name and title of representative

Lars Wingefors, Group Co-Founder and CEO

(4)

activity Descrition

Embracer Group is the parent company of companies developing and publishing PC, console, mobile and board games and other related media for the global games and entertainment market.

(5)

Stated capital

1.3 million Swedish crowns

(6)

Established

2011

(7)

Total equity

SEK 27.165 million (as of end March 2021)

(8)

Total assets

SEK 33,752 million (as of end March 2021)

(9)

Main shareholder and shareholding ratio

(at the end of March 2021)

Lars Wingefors AB

28.39%

S3D Media Inc.

9.07%

Swedbank Robur Founder

5.94%

Canada Pension Plan Investment Board

5.94%

(ten)

Relations between the parties

capital relationship

Not applicable

personal relationship

Not applicable

Business relationship

Not applicable

Applicability to related parties

Not applicable

4.

Number of shares to be transferred, number of shares held and ratio of voting rights before and after the transfer

Company Name

DYNAMIC CRYSTAL, INC.

EIDOS INTERACTIVE CORP.

(1)

Number of shares held before transfer

100,000 shares

(Number of voting rights: 100,000)

(Ratio of voting rights: 100%)

620,000 shares

(Number of voting rights: 620,000)

(Ratio of voting rights: 100%)

(2)

Number of shares to be transferred

100,000 shares

(Number of voting rights: 100,000)

620,000 shares

(Number of voting rights: 620,000)

(3)

Number of shares after transfer

– shares

(Number of voting rights: -)

(Ratio of voting rights: -%)

– shares

(Number of voting rights: -)

(Ratio of voting rights: -%)

*The transfer price is US$300 million.

5. Transaction schedule

Resolution of the Board of Directors (*1)

April 27, 2022

Conclusion of the share transfer agreement

May 2, 2022

Share transfer date(*2)

Expected to be completed in July and September 2022.

*1: The company’s board of directors has decided to entrust the final approval of the transaction to the company’s representative director, Yosuke Matsuda.

*2: The transaction is subject to various regulatory and other external approvals.

6. Future prospects

The Company is currently assessing the impact the Transaction may have on its earnings for the fiscal year ending March 2023 and will make an immediate announcement if information warranting disclosure is identified.

Advisors

Goldman Sachs Japan Co., Ltd. and Skadden, Arps, Slate, Meagher & Flom LLP respectively acted as financial advisor and legal advisor to the Company in connection with this transaction.

See the source version on businesswire.com: https://www.businesswire.com/news/home/20220502005370/en/

CONTACT: Kazuka Nohara

Corporate Communications, SQUARE ENIX HOLDINGS

[email protected]

KEYWORD: JAPAN ASIA PACIFIC

INDUSTRY KEYWORD: ENTERTAINMENT CONSUMER ELECTRONICS TECHNOLOGY GENERAL ENTERTAINMENT SOFTWARE ELECTRONIC GAMES

SOURCE: SQUARE ENIX HOLDINGS CO., LTD.

Copyright BusinessWire 2022.

PUBLISHED: 05/02/2022 05:11 AM/DISC: 05/02/2022 05:11 AM

http://www.businesswire.com/news/home/20220502005370/en

Copyright BusinessWire 2022.

Comments are closed.