Bugbear, a Helsinki-based independent studio with 18 team members developing racing games, is currently working on the critically acclaimed Wreckfest. The acquisition includes the development studio and all intellectual property rights.
THQ Nordic values Bugbear as an experienced and world leading creator of niched racing games built on their proprietary game engine enabled with vehicle destruction physics tools. Wreckfest, a demolition derby themed racing title, was successfully released for PC in June 2018 and is currently being further developed to be released on PlayStation 4 and Xbox One during 2019. Bugbear is also well known for the critically acclaimed demolition derby series FlatOut, released for PC and consoles during 2004-2007.
THQ Nordic has since 2017 acted as publisher for Wreckfest, which has been the best performing game published by THQ Nordic on Steam since its June release.
THQ Nordic strongly believes in Bugbear’s competence in developing successful action racing games and wants to make long term investments to support Bugbear’s future growth journey. The acquisition of Bugbear is also THQ Nordic’s first step into the Finnish market, often rated among the world leaders in game development and THQ Nordic foresees further strategic investments in owned studios and/or publishing deals going forward.
Both parties have agreed upon not disclosing the exact purchase price. However the purchase price matches management’s estimated royalty payments to Bugbear during the upcoming three years.
“We have been working together with Janne Alanenpää and his team since 2016, and see continued great potential in Wreckfest as well as in Bugbear’s future games pipeline. Janne Alanenpää is a legend within action racing games, and the Bugbear team will bring important development capabilities earned from creating outstanding games during almost two decades. We are very excited to have been able to acquire Bugbear and their portfolio and our aim is to build Wreckfest together into a major franchise for THQ Nordic with the release to console coming up first in time”, says Lars Wingefors, CEO THQ Nordic.
“We are very excited to join forces with the THQ Nordic team. I believe THQ Nordic will become a perfect home for Bugbear to support our passion for games and for our customer. We look forward to accelerate our development of high quality racing games to contribute to THQ Nordic’s portfolio and future growth”, says Janne Alanenpää, CEO Bugbear Entertainment.
Coffee Stain is a leading game developer and publisher with a growing footprint in the Nordics. The acquisition includes Intellectual property rights to Satisfactory, Goat Simulator, Sanctum and publishing rights to Deep Rock Galactic.
The initial cash consideration is equivalent to SEK 317 million on a cash and debt free basis, plus additional earn-out considerations subject to fulfilment of agreed milestones.THQ Nordic estimates Coffee Stain will have net sales in the range of SEK 200-250 million and EBT in the range of SEK 100-150 million in the next financial year.
"We are creating a complementary digital native pillar to THQ Nordic. Coffee Stain is a passionate and highly competent team creating and publishing great games. After some years without major releases the pipeline of new game releases such as Satisfactory and Deep Rock Galactic look strong. I look forward to work together with Anton Westbergh and his team in the future" says Lars Wingefors, CEO THQ Nordic.
The business consists of two business areas; i) Games development in Coffee Stain Studios AB (100 percent), Coffee Stain North AB (60 percent) and Lavapotion AB (60 percent) and ii) Coffee Stain Publishing AB (100 percent) and minority investment in Ghost Ship Games (35 percent) and Other Tales Interactive (20 percent).
"I strongly believe that THQ Nordic is a great home for Coffee Stain. In addition to having long experience within games development and publishing, THQ Nordic has the skills, willingness and capital to support our new releases and growth in the future", says Anton Westbergh, CEO Coffee Stain.
Over the last few years, Coffee Stain has invested into establishing the current pipeline of games which are due to be released over the coming years. Examples of announced upcoming releases are Satisfactory, Deep Rock Galactic (1.0 version), Huntdown and Goat Simulator (for Nintendo Switch). In addition, one major unannounced project based on existing IPs is to be released in the future.