REG - Keywords Studios PLC - Acquisition

Keywords StudiosAnnouncement

17/09/2020 07:00

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RNS Number : 2255Z  Keywords Studios PLC  17 September 2020

17 September 2020

 

Keywords Studios plc ("Keywords", "the Group")

 

     Acquisition of Heavy Iron Studios

 

West Coast US Expansion for Keywords' Game Development Service Line

 

Keywords Studios, the international technical and creative services provider
to the global video games industry, today announces that it has entered into a
conditional agreement to acquire the entire issued share capital of Heavy Iron
Studios, Inc. ("Heavy Iron"), a provider of specialised game development
services, for total consideration of up to US$13.3m. The acquisition will
further the Group's strategy to become the 'go to' technical and creative
services platform for the global video games industry.

 

Founded in 1999 and acquired from THQ Inc. in 2009 by Lyle Hall, a 30-year
industry veteran, Heavy Iron is based in Los Angeles, California, where its
team of 43 developers provides full game development, co-development, live
operations and porting services for the video games industry. Renowned as a
high-quality studio, Heavy Iron has recently worked on Marvel's Avengers with
Crystal Dynamics and the Call of Duty franchise with Activision as well as
multiple ports and remasters, including the full series of Disney Infinity
games. Primarily focused on high-end console and PC games, Heavy Iron's
specialty is technical expertise across multiple proprietary engine
technologies, and it has strong development experience across all major
platforms.

 

For the year ended 31 May 2020, Heavy Iron generated unaudited revenues of
US$5.4m and adjusted EBITDA of US$1.0m. Under the terms of the acquisition,
which is subject to certain closing conditions, Keywords will pay initial
consideration of US$4m in cash and  the equivalent of US$0.5m in new
ordinary shares to the seller on the first anniversary of the
acquisition, which will then be subject to orderly market provisions for a
further year. The deferred consideration of up to US$8.8m will be payable to
the seller, in a mix of cash and shares, based on performance targets being
met by the first and second year anniversaries of the acquisition.

 

Andrew Day, CEO of Keywords Studios commented:

 

"We welcome the extremely experienced and talented Heavy Iron team to the
Keywords family. The addition of Heavy Iron to the Group further strengthens
and scales our Game Development service line. By bringing a new base on the
West Coast, it will provide access to many of the world's leading game
companies and the local talent pool from where we can expand our activities in
the region and build upon our existing presence in Audio and Localisation."

 

"Now our largest service line, Game Development continues to grow strongly
with all our studios hiring.  We look forward to Lyle and his terrific team
joining us and supporting Heavy Iron's continued growth from their strong
position."

 

"This marks our third acquisition since our recent placing, and we have a
healthy pipeline of acquisition opportunities which we are actively reviewing
and advancing."

 

Lyle Hall, Chief Executive Officer of Heavy Iron, further commented:

 

"We are thrilled to be joining the Keywords Studios family and look ahead to
sustained growth. Keywords' leading position in the video games industry, its
breadth of services, and its geographical reach will strengthen our ability to
continue providing outstanding service and support to our partners. We also
look forward to collaborating with other members of the Group in offering
wider capabilities to all our clients."

 

For further information, please contact:

 

   Keywords Studios (www.keywordsstudios.com)       +353 190 22 730

   Andrew Day, Chief Executive Officer

   Jon Hauck, Chief Financial Officer

   Joseph Quinn, Investor Relations

   Numis Securities                                 020 7260 1000

   Stuart Skinner/Kevin Cruickshank/Will Baunton

   MHP Communications (Financial PR)                020 3128 8193

   Katie Hunt/James Midmer/Charles Hirst            keywords@mhpc.com (mailto:keywords@mhpc.com)

 

About Keywords Studios (www.keywordsstudios.com
(http://www.keywordsstudios.com/) )

 

Keywords Studios is an international technical services provider to the global
video games industry. Established in 1998, and now with 62 facilities in 21
countries strategically located in Asia, the Americas and Europe, it provides
integrated art creation, marketing services, software engineering, testing,
localization, audio and customer care services across more than 50 languages
and 16 games platforms to a blue-chip client base of over 950 clients across
the globe.

Keywords Studios has a strong market position, providing services to 23 of the
top 25 most prominent games companies, including Activision Blizzard, Bandai
Namco, Bethesda, Electronic Arts, Konami, Microsoft, Riot Games, Square Enix,
Supercell, TakeTwo, Epic Games and Ubisoft. Recent titles worked on include
Call of Duty: Modern Warfare, Anthem, Star Wars Jedi: Fallen Order, Assassin's
Creed Odyssey, Valorant, League of Legends, Fortnite, Clash Royale and Doom
Eternal. Keywords Studios is listed on AIM, the London Stock Exchange
regulated market (KWS.L).

 

About Heavy Iron (www.heavyiron.games (https://heavyiron.games/) )

 

Founded in August 1999, Heavy Iron Studios is a Los Angeles based video game
developer recognized as a leader in creating hit, mass-market titles for
consoles, PC, mobile, and AR/VR platforms. Since June 2009, Heavy Iron
Studios, Inc. has been a wholly independent and privately held company. Recent
titles worked on include Marvel's Avengers, Call of Duty, and The Grand Tour
Game. Titles the studio has worked on have sold a combined lifetime total of
+200 million units and generated over $2 billion in revenue, across multiple
genres and all platforms.

 

 

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