THQ Nordic AB (publ) Acquires Koch Media: Investor Presentation

Key insights

6 takeaways

01
THQ Nordic acquired Koch Media in February 2018 for a total consideration of EUR 121 million, paid via EUR 82 million in cash, EUR 9.5 million in shares, and the assumption of debt-free liabilities.See it on page 1
02
The acquisition significantly expands THQ Nordic’s portfolio to 106 intellectual properties, including major franchises such as Saints Row, Dead Island, and a long-term exclusive license for the Metro series.See it on page 2
03
The combined entity operates with 10 internal development studios, 26 external studios, and a total workforce of 1,643 employees.See it on page 5
04
For the nine-month period ending December 2017, the combined entity generated pro forma net sales of SEK 2,933 million and an adjusted EBIT of SEK 505 million.See it on page 21
05
Koch Media continues to operate as an independent entity under its existing management, including CEO Klemens Kundratitz, to maintain its role as a publishing partner for over 50 companies.See it on page 22
06
Integration strategy focuses on revenue synergies through shared distribution networks and cross-utilization of development capacity rather than cost-cutting measures.See it on page 20

Summary

THQ Nordic AB’s acquisition of Koch Media, finalized in February 2018 for a total consideration of EUR 121 million, serves to significantly scale the company’s European presence and intellectual property portfolio. The transaction integrates Koch Media’s publishing and distribution capabilities with THQ Nordic’s development assets, creating a combined entity with 10 internal development studios, 26 external studios, and a library of 106 intellectual properties. The acquisition is strategically designed to be earnings-per-share accretive, leveraging Koch Media’s position as a leading European publishing partner for over 50 companies.

Key assets acquired include the Saints Row and Dead Island franchises, as well as a long-term exclusive license for the Metro series. The deal brings together a combined workforce of 1,643 employees and a robust production pipeline, which included four AAA titles at the time of the announcement, such as Metro Exodus and Dead Island 2. Financial data for the nine-month period ending December 2017 shows the combined entity generated pro forma net sales of SEK 2,933 million and an adjusted EBIT of SEK 505 million.

The transaction structure involved a cash payment of EUR 82 million and EUR 9.5 million in shares, with the remaining balance accounted for on a debt-free basis. Following the acquisition, Koch Media continues to operate as an independent entity under its existing management, including CEO Klemens Kundratitz. The integration focuses on revenue synergies through shared distribution networks and cross-utilization of development capacity rather than cost-cutting measures. This acquisition establishes a foundation for THQ Nordic to pursue further value-enhancing growth within the global gaming market.