Keywords snaps up UK firm for €29m

Graphics created by Irish video-gaming company Keyword Studios
Graphics created by Irish video-gaming company Keyword Studios

Irish video-game company Keywords Studios has acquired UK games firm Studio Gobo and Electric Square for a total consideration of up to £26m (€29m).

Brighton-based Gobo provides development services to video game developers and publishers around the world.

The initial consideration is £10.5m in cash and 254,529 new ordinary shares in Keywords.

The remaining consideration of £11m is payable in a mix of cash and shares, or all in cash at the discretion of Keywords, and subject to the achievement of a “substantial increase” in Gobo’s earnings before interest, taxation, depreciation, and amortisation (ebitda) over the next 12 months.

Keywords said that Gobo adds “considerable expertise and scale” to its new and growing video game development business.

“By significantly enhancing our game development services in both scale and expertise, these studios help position Keywords as a go-to game development partner and give us greater visibility of games in the pipeline, at the outset of their development,” said keywords CEO Andrew Day.

Gobo’s revenue has grown from £6.2m for the year ended 30 September 2017 to an estimated £11.6m for the 12 months ending July 31 2018.

Underlying pro-forma ebitda for the same 12 months is expected to be approximately £3.6m.

Joe Quinn, analyst at Davy Stockbrokers, said the acquisition represents a “strong” deal for Keywords, strengthening its presence in mobile game development and full game development.

Including this purchase, Keywords has spent around €45m on acquisitions so far this year.

Irish Independent

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