Fanatec owner Endor AG is insolvent

The wheels could be about to stop turning at Fanatec, should a buyer not be found, as its parent company Endor AG files for insolvency.

According to the Landshut operation, its liabilities sat at “more than” €95 million, of which bank debt is €70 million. 

The company blames its founder and former Chief Executive Officer, Thomas Jackermeier, for the collapse. He recently called a general meeting, which prevented the controversial use of the German Act of Stabilisation and Restructuring of Companies (StaRUG). The blueprint was being used to, according to Endor AG, avoid insolvency, but also sell the company to American peripheral and PC part creators Corsair.

It also claims that “negotiations with the majority shareholder [Jackermeier] on a financial reorganisation involving all shareholders have been taking place in recent weeks.

“However, these negotiations had to be broken off without result due to unrealistic demands.”

Corsair sent €4 million to help the restructuring process earlier this month – however, following the breakdown of the StaRUG process, has decided to not send further financing.

The final blow came from the banks, who also rejected further financing.

Insolvency is now the only option, with Endor AG (Fanatec) unable to pay back its debts and liabilities, with its assets not covering the outstanding amounts.

How did we end up here?

The (now former) CEO Jackermeier was dismissed in March. This was, according to the company, due to banks who leant money to the outfit. They requested a change of leadership and doing so granted an extension on a pause of repayments.

The move followed, among other things, a tumultuous Black Friday 2023 sale with incorrectly discounted items, reports of slow customer service, the creation of a new headquarters and a pivotal ClubSport DD+ Wheel Base delayed from late 2023 to earlier this year.

From there, a new CEO and Chief Restructuring Officer Anders Ruff was placed at the helm, coming from a background predominantly in the food industry.

Endor AG announced in May that American peripheral and PC part creators Corsair – also custodians of the Elgato and Scuf Gaming brands – were in “exclusive negotiations” talks to purchase the then-floundering Fanatec operation.

The sim racing equipment manufacturer was to use the aforementioned StaRUG to restructure, controversially meaning existing shareholders were not set to receive a payout from the proposed takeover.

According to Endor AG, Jackermeier owns “about” 50 per cent of the operation, as of 2021.

The erstwhile CEO went on an alleged posting spree on financial forums, lobbing accusations at board members. There was also a post to the official Fanatec Facebook page by the ‘Fanatec Rebel Alliance’ – perhaps a Star Wars reference, Endor AG is named after a moon in its universe. This was swiftly deleted.

In a blunt statement, Endor AG and its board lay blame for the insolvency on previous strategies.

“The Management Board sees the reasons for the massive corporate crisis in numerous wrong management decisions in recent years.

Examples include the oversized construction of the new company headquarters, miscalculated chip and merchandise orders that led to high write-downs and failures to introduce processes and systems worth millions.”

Corsair purchase paused

The proposed Corsair purchase was under the proviso that the StaRUG process was successful.

However, with that now collapsed, the proposed takeover is on ice.

“The Management Board regrets that the negotiations with the strategic investor CORSAIR, which were already at an advanced stage, could not be finalised,” said Endor AG.

This does not mean that Corsair will not purchase Fanatec at some point, it could still happen. But, it may also not, and the existing proposal is over.

What happens next?

In the immediate term for Fanatec customers, according to the company, not much.

“Endor AG will continue its business operations during the insolvency proceedings: Sales and warranty and repair services will continue without restriction, and customers will continue to receive driver and software updates,” read its statement.

Behind the scenes, however, will be an “open-ended process to rescue the company” with a stated aim of “reorganising the company and securing the Landshut site and jobs.” Significant change is expected.

A buyer for the equipment creators must now be the top priority to keep the Fanatec brand operational.

“The Management Board is confident that the company will be taken over by an investor in the course of the insolvency proceedings; at the same time, the Management Board assumes that CORSAIR is still interested in acquiring Endor AG,” it said.

Traxion has heard that several businesses have promised capital to support Jackermeier’s efforts to regain control. The founder has been approached by Traxion for comment, but is not available at this time and Endor’s board remain uncontactable.