Corsair In Pole Position To Purchase Fanatec, Provide Interim Funding (Updated)

Corsair In Pole Position To Purchase Fanatec.jpg
Images: Thomas Harrison-Lord
The plot thickens, as Corsair signs an agreement to “negotiate exclusively” with the beleaguered sim racing equipment manufacturer.

Update May 16, 2024
Since Corsair and Fanatec's parent company Endor AG have entered discussions as part of the restructuring negotiations starting on May 9, both companies have defined and agreed to certain steps to take next, according to a press release by Endor. These steps are met "with the approval of the lending banks and the Supervisory Board."

The release reiterates the plan of Corsair providing the needed funds as part of the restructuring to avoid the imminent insolvency Endor is facing. Interim funding is set to be provided in "tranches", with the final aim being the takeover of Endor by Corsair "to stabilise the company without external debt", according to the press release.

Endor's CEO and Chief Restructuring Officer states that "during the exclusive negotiations, we perceived CORSAIR as a reliable partner that not only has the financial resources, but also knows our market well and wants to invest for the long term. Following a comprehensive review, the lending banks also decided not to support other restructuring offers because they did not believe they were suitable to avert the threat of insolvency.

While this plan has been agreed upon, it has not been signed off yet. The press release does give a time frame for this, however, stating that "a binding agreement is expected to be signed in mid-June and submitted to the restructuring court in Munich in the near future."


Original Article May 9, 2024
American gaming peripheral giant Corsair is in discussions to purchase Fanatec and parent company Endor AG.

The German sim racing equipment manufacturer has been going through a transformational period of late. First, a condition of lending banks was to dismiss company founder Thomas Jackermeier from the Chief Executive Officer role.

With that move taking place at the end of March, Andres Ruff – who was initially appointed as Chief Restructuring Officer – was placed in the CEO role in mid-April.

Late last month, the Landshut-based company issued another statement, discussing a liquidity requirement of €25 million by October 2024 and even a proposed re-investment from Jackermeier.

At the time it specifically mentioned that talks were ongoing with "several investor groups", and now it seems Corsair is the primary choice.

Fanatec BMW Wheel.jpg


“The Management Board entered into a term sheet to negotiate exclusively with US-based leader in high-performance gear and systems for gamers, content creators, and PC enthusiasts CORSAIR® (Nasdaq: CRSR) on the restructuring of the company, concluding an open-ended and intensive examination of various offers from investors and after consultation with its lending banks,” reads an Endor AG statement posted 8th May.

This does not mean that Corsair will definitively purchase Fanatec, but that is the plan. It also means the Californian company is the only entity that Endor AG will presently entertain discussions with.

“As part of the process, the Management Board has reviewed offers from various investors, including the efforts of the current main shareholder to create their own viable concept. However, such a concept has not yet been successfully created,” it continues.

This potentially discounts for now, at least during Corsair discussions, Jackermeier’s plot to return to the helm – the gimlet-eyed former leader remains the majority shareholder of the company.

Fanatec Set To Go Private If Corsair Plan Succeeds​


According to the statement, Fanatec will be restructured due to “imminent insolvency”, and during the process, an agreement is expected to be reached. The end of this month is the current target.

As part of the process, it is anticipated that Corsair will acquire Endor AG (Fanatec) and “provide sufficient financial resources to stabilize the company without any external debt.”

Speaking of debt, Endor AG claims to have €70million of “external bank debt”.

Fanatec F1 Cockpit.jpg


Should this deal be concluded, Endor AG (and thus Fanatec) will cease to be a public listing, becoming privately owned and delisted from stock exchanges. Current shareowners are not set to receive compensation, according to Endor AG.

Shares shrunk to their lowest since 2016 on Thursday morning early trading following the news.

Fanatec has a vast sim racing ecosystem across PC and console, is one of only two manufacturers to produce licenced PlayStation-compatible direct drive wheel bases and just extended its licencing deal with Formula 1.

Corsair Gaming primarily creates PC components, gaming PCs and accessories. It also owns popular streaming equipment brand Elgato and customised controller creators SCUF Gaming.

News In Summary​

  • Endor AG is the publically-listed parent company of Fanatec, founded by Thomas Jackermeier in 1997
  • Jackermeier was ousted from his role of CEO in March, as requested by loaning banks
  • Andres Ruff appointed replacement CEO in April
  • Share price dips by over 90% that same month, when compared to the same time in 2023
  • Jackermeier creates a plan to reinvest and regain control, which has so far not been accepted
  • It becomes apparent that Endor AG has €70million of “external bank debt” and is facing “imminent insolvency”
  • Corsair (gaming PCs, also owns Elgato and SCUF) signs agreement to be the only potential buyer who can negotiate, 8th May
  • Corsair's plan, should it go through, is to purchase Endor AG (and thus Fanatec), remove it from the stock market and somehow compensate existing shareholders
  • Shares shrunk to their lowest since 2016 following the news
  • The deal is not yet concluded
About author
Thomas Harrison-Lord
A freelance sim racing, motorsport and automotive journalist. Credits include Autosport Magazine, Motorsport.com, RaceDepartment, OverTake, Traxion and TheSixthAxis.

Comments

It would be great if Thomas could gain control back again. Having watched a variety of YouTube videos on the subject and the ongoing in-fighting it sounds like he got a raw deal and that is been planned for some time. If he does get back in charge, maybe don't go building a kart track on top of your premises and run things a bit less "flashy".
 
Premium
Indeed... Kireth put out a video on this as well. Hopefully it will end up well for our hobby. Fanatec became a houshold name in, almost synonym with, simracing. It would be a pity see the name vanish in shame.

 
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Premium
So, Fanalab and all the crappy tech support incompetence will remain, just like the faulty iCue software with their rubbish Corsair online support? Should be a great fit! iCure software doesn't even work properly!
 
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Which dictionary are you using for that definition, out of interest?
firstly ; i took it from my local oral tradition ; my granny would say it ; to mean someone who was sneaky ; dishonest ;

but reading back the comment is eyed ... so my bad ;
but the gimlet eye can be found in older dictionary's;

like the century dictionary here


Andi
 
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Premium
and not it
para 6 typo not /= now. Again. Seriously, MS Office has had spell and grammar checkers for years, and yet every other article I read on RD I end up posting corrections. Get an expletive deleted editor , or just get someone (other than me) to proof your work. Or employ me. Or keep looking like amateurs who can't write or spell. Your choice.

Also, starting a story in the middle and assuming your readers know what you're on about is bad form, a recap for those just joining the story is normal. 'The plot thickens' only makes sense if you know about a plot.

Re the actual article, as someone pretty heavily invested in the Fanatec ecosystem and with experience of just how crappy their support system is I'm not sure whether to be hopeful or worried. As it's out of my control I suppose I'll just get on with my life and hope for the best. They can't get much worse, right?

Right?
 
I don't really know the backstory here but it seems crazy that such a popular company should be in this position. I guess the simulation craze of the pandemic has passed now so the market maybe isn't growing as rapidly, but I would guess it's still growing at a steady rate, I can only see sim racing becoming more and more established, especially as it's now a somewhat legitimate path to a real racing career.
So Fanatec, even with debt, seems like a company that should be able to make good money going forward.
 
seems like our hobby does not make for good investment, iRacing had to be bailed out twice if I understand that correctly, other than EA nobody seems to be halfway profitable. pity to all people investing, 90% drop in share prices, ouch.
 
70 million in debt sounds like a lot, but with over 100 million in annual revenues and the console market just shared with underwhelming competitors, buying Fanatec for similar price might be a hostile takeover initiated by the bank. With all those costly marketing like the sponsoring it seems to me, that there was enough potential to cut costs to be profitable, at least before the service and supply problems diminished a lot of the reputation. First I blamed all problems on TJ, but also possible that some people high up the hierarchy were not acting in the best interest of the company.
 
seems like our hobby does not make for good investment, iRacing had to be bailed out twice if I understand that correctly, other than EA nobody seems to be halfway profitable. pity to all people investing, 90% drop in share prices, ouch.
It's still a relatively niche consumer group. The main benefit of selling to sim racers seems to be we spend big and have some loyalty to the niche, in that they'll be doing the same thing on different software ten years from now, and our spend will probably go up over that time period as we move to better equipment.
I think some companies just got over excited at the prospect of a new market with load of people willing to spend big. It's a good market but it's never going to be a mainstream market.
 

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