Is Asmodee For Sale?

Is Asmodee For Sale?

Shellie Rose     
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Asmodee

Asmodee Explores Sale, says source: Reuters

Asmodee group "is exploring a sale that could value it at more than 1.5 billion," according to this report from Reuters: Board Game Company Explores Sale

Asmodee (aka the Creature that ate the board gaming world) has been aggressively acquiring board game companies in the US for the past few years, including Mayfair, Fantasy Flight Games, Z-man, Plaid Hat, Days of Wonder, Catan Studio and several others. In fact it is probably easier to list what they don't own than what they do own.

In 2015 Asmodee controversially announced plans that many claimed were aimed at restricting online sale of their products and imposing price floors, but in a follow up announcement refuted these claims. 

So how will a possible sale of Asmodee impact the board game industry, and board games, and gamers?

Is Asmodee For Sale? There Will Be Games
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Posted: 10 May 2018 10:51 by Michael Barnes #273042
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Sweet! I am going to buy it and rename the company Gaming by Michael!
Posted: 10 May 2018 11:10 by Sagrilarus #273044
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Wow. Wouldn't it be something if this has been a private equity siphon and they're neck deep in overhead. Sounds suspicious as hell that they're offered for sale after purchasing so much of the marketplace.

I wonder who the people are that are "familiar with the matter."
Posted: 10 May 2018 11:13 by Sagrilarus #273046
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Good question at the end. It depends on the health of the company, and if the current owners have harvested most of its cash value already.

The term "Private Equity Company" does not have a sweet aroma at the moment, and is featured prominently in that article.
Posted: 10 May 2018 11:25 by Legomancer #273047
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It's possible that private equity companies elsewhere don't operate the way US ones do, but it's hard not to see a TRU/KB Toys/Guitar Center in Asmodee's future.
Posted: 10 May 2018 11:43 by Sagrilarus #273055
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Legomancer wrote:
It's possible that private equity companies elsewhere don't operate the way US ones do, but it's hard not to see a TRU/KB Toys/Guitar Center in Asmodee's future.

Here's hoping.

I think it's unlikely, but could you imagine if Asmodee bought up all the small players in the game publishing industry and then cratered all of them at once? That would be an interesting day.
Posted: 10 May 2018 12:13 by charlest #273063
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Sagrilarus wrote:
Legomancer wrote:
It's possible that private equity companies elsewhere don't operate the way US ones do, but it's hard not to see a TRU/KB Toys/Guitar Center in Asmodee's future.

Here's hoping.

I think it's unlikely, but could you imagine if Asmodee bought up all the small players in the game publishing industry and then cratered all of them at once? That would be an interesting day.

I'm sure this site would love it if Kickstarter became even a larger portion of the pie.
Posted: 10 May 2018 13:19 by Msample #273080
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My uninformed guess is that the current owners realized some efficiencies with combining the various brands under Asmodee North America, bought low and will sell higher, and have also enjoyed some short term revenue increases as the overall game trade has seen some nice growth the last few years.

The next owners, that's gonna get interesting. They'll have to recoup their investment somehow .

Sagrilarus wrote:
Legomancer wrote:
It's possible that private equity companies elsewhere don't operate the way US ones do, but it's hard not to see a TRU/KB Toys/Guitar Center in Asmodee's future.

Here's hoping.

I think it's unlikely, but could you imagine if Asmodee bought up all the small players in the game publishing industry and then cratered all of them at once? That would be an interesting day.

The main difference being that Asmodee doesn't have the albatross of crippling overhead - retail storefront leases - hanging over its head. Toys R Us esp was very late to realize it had to cull its real estate portfolio til it was too late.
Posted: 10 May 2018 13:33 by Sagrilarus #273082
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Asmodee is currently a confederacy of a bunch of different corporate cultures and rules. Not much real estate, but I wouldn't be surprised if they don't have a lot of unnecessary overhead.

Toys R Us went out of business because their owners self-dealt all the company's value into their own bank accounts. They hired themselves as business consultants and paid themselves crazy high hourly rates. They looted TRU's treasury.

My guess for Asmodee is that they've decided the whole is worth more than the parts, or at least think they can convince someone of that. Just a simple offer, maybe with a buyer in mind.

May be asking a sky-high price and hoping for someone at random to bite. There's other reasons to sell, tax dodge, avoidance of financial liabilities, etc. (including selling more or less to themselves under new paperwork that absolves them of prior promises), or the threat of a sale may factor into a business deal currently under consideration. Might be bluff. There's no telling from the outside. Best guess is they're just looking to cash out, announcing that they're open to offers.

Who the heck is going to buy? Any guesses?
Posted: 10 May 2018 13:41 by RobertB #273084
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Legomancer wrote:
It's possible that private equity companies elsewhere don't operate the way US ones do, but it's hard not to see a TRU/KB Toys/Guitar Center in Asmodee's future.

The US company I work for was bought out a few years ago by a private equity group. It wasn't a pure evil LBO, although IIRC some money was borrowed. The buyout's objective, at least in my admittedly faulty memory, was to do things like Msample is stating upthread: to just run things 'better', let the world catch up to how awesome this company is, then sell it (or various pieces parts) for mad profits. It was never meant to be a Berkshire Hathaway "Buy awesome company as a cash cow" deal, or an LBO take-the-money-and-run deal. Did it work? Hell if I know - things didn't change a whole lot where I sit, and my paychecks are still clearing.
Posted: 10 May 2018 14:05 by stoic #273087
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Well, what's actually for sale when they purchase Asmodee North America?

What did Asmodee loot from the purchase of FFG? What's it keeping?
Will the new buyer receive simply the intellectual property to FFG's stable of games? And, is the distribution limited to North America?
Are they selling the expertise of the old FFG executives regarding how to build a game from the ground up and having it manufactured in China on a profit basis?
Are they selling the supply chains and game store relationships?
Is the buyer receiving a stable of game designers with designs in the loop and ready to go?
Are they selling the Star Wars rights? Game of Thrones?
What's in the deal?
Posted: 10 May 2018 14:17 by SuperflyTNT #273088
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Well, now we know why they bought them all. It wasn’t for manufacturing efficiency of scale.

They bought them to buy market share so they would be attractive to venture capitalists. They clearly always wanted to sell, and the last two years of acquisitions were solely to get share without building anything.

The guys who sold their companies for cash + Tier 1/2 shares of Asmodee May end up filthy rich.
Posted: 10 May 2018 14:19 by barrowdown #273089
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stoic wrote:
Well, what's actually for sale when they purchase Asmodee North America?

What did Asmodee loot from the purchase of FFG? What's it keeping?
Will the new buyer receive simply the intellectual property to FFG's stable of games? And, is the distribution limited to North America?
Are they selling the expertise of the old FFG executives regarding how to build a game from the ground up and having it manufactured in China on a profit basis?
Are they selling the supply chains and game store relationships?
Is the buyer receiving a stable of game designers with designs in the loop and ready to go?
Are they selling the Star Wars rights? Game of Thrones?
What's in the deal?

That's all unknown because they have asked it to be confidential, but it looks like its the owner of Asmodee (Eurazeo) that is planning on selling Asmodee off, not Asmodee looking to part itself out. Obviously getting parted out could easily be an option, but judging by the rapid acquisitions in the recent past it would likely be to sell a single block that due to its reach/efficiency is potentially worth more than the sum of its parts.
Posted: 10 May 2018 14:34 by stoic #273092
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barrowdown wrote:
stoic wrote:
Well, what's actually for sale when they purchase Asmodee North America?

What did Asmodee loot from the purchase of FFG? What's it keeping?
Will the new buyer receive simply the intellectual property to FFG's stable of games? And, is the distribution limited to North America?
Are they selling the expertise of the old FFG executives regarding how to build a game from the ground up and having it manufactured in China on a profit basis?
Are they selling the supply chains and game store relationships?
Is the buyer receiving a stable of game designers with designs in the loop and ready to go?
Are they selling the Star Wars rights? Game of Thrones?
What's in the deal?

That's all unknown because they have asked it to be confidential, but it looks like its the owner of Asmodee (Eurazeo) that is planning on selling Asmodee off, not Asmodee looking to part itself out. Obviously getting parted out could easily be an option, but judging by the rapid acquisitions in the recent past it would likely be to sell a single block that due to its reach/efficiency is potentially worth more than the sum of its parts.

I misunderstood what was being sold. I thought it was only Asmodee North America. If it's all of Asmodee, I understand exactly what you wrote and agree. It's an essentially and almost monopoly of the hobby game market. It should sell well if there's a buyer large enough to buy it. Hasbro?
Posted: 10 May 2018 14:35 by Sagrilarus #273093
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Yeah, but did they purchase more than 10 companies? I'm pretty sure that once you're 11 or bigger you can't be acquired.
Posted: 10 May 2018 14:43 by Black Barney #273096
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Is Sag making a joke? A reference to some game mechanic I'm unaware of?
Posted: 10 May 2018 14:49 by Shellhead #273098
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Black Barney wrote:
Is Sag making a joke? A reference to some game mechanic I'm unaware of?

He is making a reference to Acquire.

I'm a little worried for some people that I know personally who work at Asmodee North America. They went from two employees circa 2000 to 80+ last year. A buyer is likely to look for some quick cost-cutting in payroll to recoup part of their investment.
Posted: 10 May 2018 15:17 by barrowdown #273102
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In the US market, the only toy/game companies large enough would be Mattel or Hasbro, right? They are both hurting from the collapse of TRU, so maybe this would be a quick way to stabilize (and it has an established pipeline and distribution)? I'm not familiar enough with the European market to know if they have a similar company that is at that size.
Posted: 10 May 2018 15:57 by stoic #273106
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Could it also mean that Asmodee is dumping its board game assets given the new trade war with China? Perhaps, ROI won't be as good since the profits will go down without cheap Chinese manufacturing and labor?