The board of directors of Embracer Group have announced they are spinning off Dark Horse Comics’ parent division Fellowship Entertainment into a separate, publicly listed company. The move is expected to be completed sometime in 2027. CEO Phil Rogers, COO Lee Guinchard, and CFO Müge Bouillon will retain their respective roles at Fellowship, with a recruitment process to replace them at Embracer now underway.
Lars Wingefors, Chair of Embracer’s Board, states, “This separation is about sharper management focus and clearer accountability, giving each business the structure and leadership to realize more of its full potential. I am truly excited about Fellowship Entertainment’s prospects to organically grow substantially over the coming years.”
Phil Rogers adds, “Our direction is clear: to build a more disciplined group with two distinct businesses, each with a mandate and a structure that supports transparency and execution. I am confident that this is the right path forward to deliver long-term value for our fans, our businesses and IPs, our people, and our shareholders.”
Dark Horse was acquired by the Sweden-based Embracer in 2021, and has remained part of the company, while other divisions were sold off to help pay off its debts. The move comes shortly after Dark Horse founder Mike Richardson was laid off after 40 years at the publisher. Wingefors adds in an open letter, “Dark Horse will operationally become part of the new IP & Licensing business unit with its long track record of co-producing film and TV shows with partners in Hollywood.”
In that letter, Wingefors went into detail on the thinking behind the move:
The decision to spin off Fellowship Entertainment is based on the learnings from the spin-off of Asmodee and Coffee Stain. Operationally these businesses have delivered strong results and have also accelerated strategic initiatives, each supported by a more focused management team and improved governance with a dedicated board of directors.
To give you some additional background to the decision, we have been discussing the market cap size of the two separate entities as one of the largest challenges. I’m well aware that by cutting a pie into more pieces you do not automatically see increased shareholder value. The board has been unanimous in the decision that the new entities on a separate basis are likely to generate faster cash flow growth and higher returns by improved and more focused execution. We do not expect overall corporate costs to increase due to the spin-off. Our ambition is to operate a lean and efficient overhead for each of the groups. Considering the actual separation is planned in 2027, and the fact the Fellowship Entertainment has a notably stronger product pipeline for 2027 and onwards we believe the timing is about right. One of the learnings from the Coffee Stain spin-off on Nasdaq First North is that there was a significant sell-off from passive index investors. Therefore, we are now aiming for the Nasdaq main market.
We firmly believe that Fellowship Entertainment on a standalone basis will have more attractive and easy-to-understand investor communication and that it will, over time, attract a larger pool of international investors. The planned CMD ahead of the spin-off will be an important event to educate the market in detail about its prospects.
Since Richardson’s ouster earlier this year, Middle Earth Group head Jay Komas has been running Dark Horse on an interim basis, and given all the moves towards a licensing model, its role in generating IP seems of value to the new entity.
Other divisions at Fellowship include Crystal Dynamics (developer of the Tomb Raider games), Eidos-Montréal (Deus Ex), Warhorse Studios (Kingdom Come: Deliverance), and last but not least, Middle-earth Enterprises, the owner of the film, stage and merchandising rights for The Hobbit and The Lord of the Rings, which the company derives its name from. Companies that will remain with Embracer Group consist of Aspyr, Beamdog, CrazyLabs, Deca, Demiurge, DPI Merchandising, Limited Run Games, Milestone, PLAION, THQ Nordic, Tripwire, and Vertigo Games.
—Additional reporting by Heidi MacDonald
