Corsair Set to Acquire the Fanatec Product Line from Endor AG

Rhea-AI Summary

Corsair (NASDAQ: CRSR) has announced the acquisition of the Fanatec Sim Racing brand from Endor AG, expected to close within the week. Fanatec, based in Landshut, Germany, produces high-end racing simulator accessories for PlayStation, Xbox, and PC. The brand reported approximately $110 million in product sales for 2023 (unaudited).

This strategic move accelerates Corsair's investment in the rapidly growing Sim Racing market, estimated at $1 billion with a 20% annual growth rate. Corsair plans to leverage its supply chain and logistics network to reduce operating costs and improve customer service. The company intends to maintain Fanatec's core business in Landshut while expanding its product development capabilities.

Positive

• Acquisition of Fanatec brand with $110 million in 2023 product sales
• Entry into the $1 billion Sim Racing market with 20% annual growth rate
• Potential for cost reduction and improved customer service through Corsair's network
• Expansion of Corsair's product portfolio in the gaming peripherals sector
• Synergy with Corsair's existing product lines for complete Sim Racing solutions

Negative

• Fanatec business currently not profitable, requiring turnaround efforts
• Potential integration challenges and costs associated with the acquisition
• Risks associated with entering a new market segment

Insights

Financial Analyst

The acquisition of Fanatec by Corsair (NASDAQ: CRSR) is a strategic move that could significantly impact Corsair's market position and financial performance. With Fanatec's reported $110 million in product sales for 2023, this acquisition immediately boosts Corsair's revenue stream. The sim racing market's projected 20% annual growth rate presents a substantial opportunity for Corsair to capitalize on this rapidly expanding sector.

However, investors should note that Corsair plans to make "significant investments" in the Fanatec brand, which could impact short-term profitability. The focus on reducing operating costs through Corsair's supply chain and logistics network may lead to improved margins in the medium to long term. This acquisition aligns with Corsair's strategy to diversify its product portfolio and tap into the growing sim racing market, potentially driving future growth and shareholder value.

Market Research Analyst

Corsair's acquisition of Fanatec is a game-changer in the sim racing industry. With the market estimated at $1 billion and growing rapidly, this move positions Corsair as a dominant player in a niche but expanding sector. The synergy between Fanatec's premium products and Corsair's existing gaming ecosystem creates a comprehensive solution for sim racing enthusiasts.

This acquisition allows Corsair to leverage cross-selling opportunities, potentially boosting sales across its product lines. The integration of Fanatec's German-based operations could also enhance Corsair's European presence. However, the challenge lies in maintaining Fanatec's brand identity while integrating it into Corsair's corporate structure. The success of this acquisition will depend on Corsair's ability to execute its integration strategy effectively and capitalize on the growing interest in motorsports and sim racing.

Tech Expert

From a technological standpoint, Corsair's acquisition of Fanatec is a strategic coup. Fanatec's expertise in force feedback technology and high-end sim racing peripherals complements Corsair's recent entry into the sim racing chassis market. This combination creates a vertically integrated ecosystem for sim racing, from PC components to specialized peripherals.

The acquisition could accelerate product innovation, potentially leading to more advanced and integrated sim racing solutions. Corsair's experience in PC gaming peripherals could be leveraged to enhance Fanatec's product line, while Fanatec's sim racing expertise could inform improvements in Corsair's broader gaming offerings. However, the challenge will be in maintaining Fanatec's reputation for quality and innovation while integrating it into Corsair's product development cycle. The success of this merger will hinge on effective knowledge transfer and collaborative R&D efforts between the two entities.

Acquisition of Premium Fanatec Brand Accelerates Corsair’s Investment in Sim Racing

MILPITAS, Calif.--(BUSINESS WIRE)-- CORSAIR® (Nasdaq: CRSR) announced today the signing of a definitive agreement to acquire the Fanatec Sim Racing brand and all associated personnel, in an asset purchase from Endor AG. The acquisition is expected to close within the week.

Located in Landshut, Germany, Fanatec Sim Racing products include force feedback steering wheels and wheelbases, pedals, shifters and other accessories for PlayStation, Xbox, and PC-based racing simulators. Endor reported that Fanatec product sales were approximately $110 million for 2023 (unaudited). (Photo: Business Wire)

Located in Landshut, Germany, Fanatec Sim Racing products include force feedback steering wheels and wheelbases, pedals, shifters and other accessories for PlayStation, Xbox, and PC-based racing simulators. Endor reported that Fanatec product sales were approximately $110 million for 2023 (unaudited).

“We have been a fan of the Fanatec brand for years, and I am thrilled that we were finally chosen to be the next home for Fanatec products. We intend to use our extensive supply chain and logistics network to reduce operating costs, enhance users’ customer service experience, increase sales opportunities, and help the business return to profitability,” said Andy Paul, CEO of Corsair. “We intend to maintain the core business in Landshut while expanding its position as a world-class product development center for Sim Racing products. With a strong two-decade legacy, Fanatec is recognized as a pioneer and a mainstay for racing enthusiasts across the globe, and we look forward to building on that heritage as we leverage Corsair’s long track record of product innovation and customer experience leadership.”

Fanatec has seen significant growth over the last five years in part due to the growth in on-track racing interest, as the swelling global popularity of motorsports has translated into an increased popularity for Sim Racing. Industry reports estimate the Sim Racing components market at approximately $1 billion, with an expected 20 percent annual growth rate.

Following on Corsair’s recent announcement of entering into this exciting market with its revolutionary Sim Racing chassis, today’s announcement immediately enhances and expands Corsair’s product breadth, uniquely positioning the Company as a leading Sim Racing end-to-end product solution. Corsair existing product lines, such as Gaming PCs, Components to build Gaming PCs, Gaming and Streaming Peripherals, and Monitors are all products that can be used when building a complete Sim Racing Rig.

CORSAIR plans to make significant investments in the Fanatec brand, its products, and increasing worldwide availability through our channels. All current and future Fanatec customers will benefit from the world-class support from CORSAIR, including warranty and software updates going forward.

About CORSAIR

CORSAIR (Nasdaq: CRSR) is a leading global developer and manufacturer of high-performance gear and technology for gamers, content creators, and PC enthusiasts. From award-winning PC components and peripherals to premium streaming equipment and smart ambient lighting, Corsair delivers a full ecosystem of products that work together to enable everyone, from casual gamers to committed professionals, to perform at their very best.

Copyright © 2024 Corsair Gaming, Inc. All rights reserved. CORSAIR and the sails logo are registered trademarks of CORSAIR in the United States and/or other countries. All other company and/or product names may be trade names, trademarks, and/or registered trademarks of the respective owners with which they are associated.

Forward Looking Statements

Except for the historical information contained herein, the matters set forth in this press release are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, the timing of closing Corsair’s acquisition of the Fanatec Sim Racing brand and all associated personnel; Corsair’s ability to use its extensive supply chain and logistic networks to reduce Fanatec’s operating costs, enhance users’ customer service experience, increase sales opportunities, and help the Fanatec return to profitability; Corsair’s plans for managing the Fanatec brand and other assets; and expected market sized and growth. Forward-looking statements are based on our management’s beliefs, as well as assumptions made by, and information currently available to them. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. Factors which may cause actual results to differ materially from current expectations include, but are not limited to: current macroeconomic conditions, including the impacts of high inflation and risk of recession, on demand for our products, consumer confidence and financial markets generally; the lingering impacts and future outbreaks of the COVID-19 pandemic and its impacts on our operations and the operations of our manufacturers, retailers and other partners, as well as its impacts on the economy overall, including capital markets; our ability to build and maintain the strength of our brand among gaming and streaming enthusiasts and our ability to continuously develop and successfully market new products and improvements to existing products; the introduction and success of new third-party high-performance computer hardware, particularly graphics processing units and central processing units as well as sophisticated new video games; fluctuations in operating results; the risk that we are not able to compete with competitors and/or that the gaming industry, including streaming and esports, does not grow as expected or declines; the loss or inability to attract and retain key management; the impacts from geopolitical events and unrest; delays or disruptions at our or third-parties’ manufacturing and distribution facilities; the risk that we are not able to successfully identify and close acquisitions, as well as integrate any companies or assets we have acquired or may acquire including the Fanatec brand and other assets; whether Corsair is able to realize any synergies with businesses or assets it may acquire including its acquisition of the Fanatec brand and other assets; currency exchange rate fluctuations or international trade disputes resulting in our products becoming relatively more expensive to our overseas customers or resulting in an increase in our manufacturing costs; and the other factors described under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission (“SEC”) and our subsequent filings with the SEC. Copies of each filing may be obtained from us or the SEC. All forward-looking statements reflect our beliefs and assumptions only as of the date of this press release. We undertake no obligation to update forward-looking statements to reflect future events or circumstances.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240916582811/en/

Investor Relations:

Ronald van Veen

ir@corsair.com

510-578-1407

Media:

Corsair PR

publicrelations@corsair.com

Source: CORSAIR

FAQ

What is the value of Fanatec's product sales that Corsair (CRSR) is acquiring?

Fanatec reported approximately $110 million in product sales for 2023 (unaudited), according to the press release.

When is Corsair's (CRSR) acquisition of Fanatec expected to close?

The acquisition is expected to close within the week of the announcement, as stated in the press release.

What is the estimated size and growth rate of the Sim Racing market that Corsair (CRSR) is entering?

Industry reports estimate the Sim Racing components market at approximately $1 billion, with an expected 20 percent annual growth rate.

What types of products does Fanatec offer that Corsair (CRSR) will now acquire?

Fanatec offers force feedback steering wheels and wheelbases, pedals, shifters, and other accessories for PlayStation, Xbox, and PC-based racing simulators.

How does Corsair (CRSR) plan to improve Fanatec's business operations?

Corsair plans to use its extensive supply chain and logistics network to reduce operating costs, enhance customer service, increase sales opportunities, and help the business return to profitability.