MILPITAS, Calif. - Corsair Gaming, Inc. (NASDAQ: CRSR), a leading global developer and manufacturer of high-performance gear for gamers, content creators, and PC enthusiasts, has announced its definitive agreement to acquire the Fanatec Sim Racing brand from Endor AG. The transaction is expected to be finalized within the week.
Fanatec, located in Landshut, Germany, is known for its force feedback steering wheels, wheelbases, pedals, shifters, and other accessories for racing simulators across PlayStation, Xbox, and PC platforms. In 2023, Fanatec achieved sales of approximately $110 million, as reported by Endor AG, though these figures are unaudited.
Andy Paul, CEO of Corsair, expressed enthusiasm about the acquisition, stating that Corsair intends to leverage its supply chain and logistics expertise to reduce operating costs and enhance customer service for Fanatec's products. The goal is to increase sales opportunities and return the business to profitability. Corsair plans to maintain Fanatec’s core operations in Landshut and expand its role as a product development center for Sim Racing products.
The acquisition comes at a time when the Sim Racing components market is estimated to be worth around $1 billion, with an expected annual growth rate of 20 percent. Corsair's move to acquire Fanatec is seen as a strategic expansion into the Sim Racing market, following their recent launch of a Sim Racing chassis. Corsair believes that the addition of Fanatec will complement its existing product lines, which include gaming PCs, components, peripherals, and monitors, all of which are integral to building a complete Sim Racing rig.
Corsair has committed to significant investment in the Fanatec brand to enhance its products and increase their global availability. All current and future Fanatec customers are expected to benefit from Corsair's support, including warranty and software updates.
This news is based on a press release statement and reflects the company's current expectations and projections about future events. Corsair is recognized for its award-winning PC components and peripherals, as well as streaming equipment and smart ambient lighting, aiming to deliver a comprehensive ecosystem of products for its customers.
The forward-looking statements in the press release are subject to various risks and uncertainties that could cause actual results to differ materially from those projected. Factors such as economic conditions, market demand, competition, geopolitical events, and currency exchange rate fluctuations are among the considerations that may impact the future success of the acquisition and Corsair's growth in the Sim Racing market.
In other recent news, Corsair Gaming reported a decline in net revenue for the second quarter of 2024 to $261.3 million, down from $325.4 million in the same quarter the previous year. Despite this, the company's gamer and creator peripheral segment experienced a 20% year-over-year growth, attributed to successful product launches. Corsair Gaming also announced cost-saving measures, including a reduction of approximately 100 employees and cuts in external expenses.
The company revised its full-year 2024 outlook, expecting revenue between $1.25 billion and $1.35 billion, and adjusted EBITDA between $60 million and $75 million. Corsair Gaming expressed interest in acquiring the SIM racing brand Fanatec, with plans to launch SIM racing products in the future.
The company anticipates growth in the gamer and creator peripheral segment over time and plans to acquire smaller companies in the peripheral and enthusiast space. Corsair Gaming expects normal seasonal growth in the third and fourth quarters, and remains confident in meeting demand and supporting growth. Despite a challenging landscape, the company remains optimistic about its long-term prospects.
InvestingPro Insights
Corsair Gaming, Inc.'s (NASDAQ: CRSR) latest strategic move to acquire the Fanatec Sim Racing brand is set against a backdrop of mixed financial metrics. As of the last twelve months leading up to Q2 2024, the company's market capitalization stands at $653.52 million. Despite facing challenges such as a slight revenue decline of 0.78%, Corsair's gross profit margin remains healthy at 24.78%, indicating a strong ability to control costs relative to sales.
One InvestingPro Tip worth noting is that despite the stock's price volatility and significant decline over the past year, Corsair's liquid assets exceed its short-term obligations, which positions the company to manage its immediate financial liabilities effectively. Additionally, analysts predict Corsair will become profitable this year, providing a potential upside to investors as the company works to integrate Fanatec's operations and capitalize on the growing Sim Racing market.
From a valuation perspective, Corsair's P/E ratio is currently negative at -16.31, reflecting earnings challenges in the recent past. However, with the company's commitment to invest in the Fanatec brand and enhance its global availability, there may be opportunities for Corsair to reverse this trend and improve its earnings outlook.
For readers interested in more detailed analysis and additional InvestingPro Tips, there are 11 more tips available on Corsair Gaming, Inc., which can be accessed at InvestingPro: https://www.investing.com/pro/CRSR. These insights could provide further context and investment considerations surrounding Corsair's financial health and market position as they work to expand into the Sim Racing sector.
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