505 Games parent company moves to acquire Starbreeze assets 

505 Games parent company Digital Bros. is set to acquire Starbreeze AB’s assets for €19.2 million (£16.2m).

In a press release, the company – which publishes the console version of Starbreeze’s PayDay 2 through 505 Games – says its board of directors has authorised its chairman, Abramo Galante, to proceed with the purchase of assets currently held by Smilegate Holdings with the view of becoming the major shareholder and securing “greater control over Starbreeze AB’s corporate strategy”.

Currently, Starbreeze AB’s major stakeholder Digital Bros currently own 7 per cent of the share capital and 28.6 per cent of the voting rights. If the acquisition goes ahead, Digital Bros will own 30.18 per cent of Starbreeze’s share capital and 40.83 per cent of the voting rights, meaning “Digital Bros would have the obligation to launch a public tender offer for the residual Starbreeze AB shares”. 

It’s thought the overall assets nominal value is approximately €36 million (£30.4m).

“In the light of the existing business relationship, Digital Bros considers the increase of its interest in Starbreeze AB as a step enabling the Group to exert greater control over the corporate strategy of Starbreeze AB going forward,” it said via press release.

The Payday 2 developer submitted an administrator-approved plan to the Stockholm District Court in November 2019 to allow the studio to repay its debts after it revealed in August 2019 that it had closed the second period of the financial period with an EBITDA (earnings before interest, tax, depreciation, and amortization) loss of SEK 25.8m/$2.7m.

Starbreeze hopes to repay the debts they had accrued as of December 2018 within five years, with an interest rate of 5 per cent. The plan is intended to allow Starbreeze to repay the company’s creditors, who are separated into two categories: “supplier creditors” who are owed over SEK 1.04m/$107,000, and “minor supplier creditors” who are owed less.

While the PayDay developer continues to sell off its assets – most recently Psychonauts 2 and 10 Crowns – and has bumped up net revenue by SEK 14.4m, the sale of the publishing rights generated SEK 137m, which accounts for a whopping 85.6 per cent of the company’s total revenue over that period. PayDay 2 continues to be the studio’s key income generator but that too has seen a significant drop, earning just SEK 14.5m compared to last year’s SEK 31m.