ACQUISITIONS

3 Months Ended

Jun. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

ACQUISITIONS

ACQUISITIONS

On June 11, 2024, we completed the purchase of 100% of the issued and outstanding capital stock of The Gearbox Entertainment Company, Inc. ("Gearbox"), from Embracer Group AB, for an initial consideration of 2.8 shares of our common stock.

We acquired Gearbox, a leading developer of console and PC games, as part of our ongoing strategy to strengthen our industry-leading creative talent and portfolio of owned intellectual property. The combination enhances the financial profile of our existing projects with Gearbox and unlocks the opportunities to drive increased long-term growth.

The acquisition-date fair value of the consideration totaled $440.7, which consisted of the following:

	Fair value of purchase consideration
Common stock (2.8 shares)	$	454.3
Deferred payment	1.0
Settlement of pre-existing relationship	(14.6)
Total	$	440.7

We used the acquisition method of accounting and recognized assets and liabilities at their fair value as of the date of acquisition, with the excess recorded to goodwill. As we finalize our estimation of the fair value of the assets acquired and liabilities assumed, additional adjustments may be recorded during the measurement period (a period not to exceed 12 months from the acquisition date). The initial accounting is incomplete as of June 30, 2024 for the acquired assets and assumed liabilities. Additional intangible assets may be recognized as the valuation is complete. The following table summarizes the preliminary acquisition date fair value of net tangible and intangible assets acquired, net of liabilities assumed from Gearbox:

	Fair Value		Weighted average useful life
Cash acquired	$	9.6	N/A
Other tangible assets	152.4		N/A
Other liabilities assumed	(129.6)		N/A
Intangible Assets
Developed game technology	84.1		4
Games in development	34.9		N/A
Branding and trade names	4.1		5
Goodwill	285.2		N/A
Total	$	440.7

Goodwill, which is not deductible for tax purposes, is primarily attributable to the assembled workforce of the acquired business and expected synergies at the time of the acquisition.

The amounts of revenue and earnings of Gearbox included in our Condensed Consolidated Statements of Operations from the acquisition date are as follows:

	Three Months Ended June 30, 2024
Net revenue	$	1.6
Net loss	(4.5)

Supplemental pro-forma financial information has not been provided as the historical results of Gearbox were not material to us.

Transaction costs of $6.0 for the three months ended June 30, 2024 have been recorded within General and administrative expense in our Condensed Consolidated Statements of Operation.