REG - Keywords Studios PLC - Acquisition

Keywords StudiosAnnouncement

30/03/2023 07:00

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RNS Number : 6781U  Keywords Studios PLC  30 March 2023

30 March 2023

 

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

 Acquisition of Digital Media Management, Inc. ("DMM", the "Company")

Adds significant US expertise and scale to Keywords' digital and social media
marketing

Keywords Studios, the international technical and creative services provider
to the global video games and entertainment industries, is pleased to announce
that it has acquired Digital Media Management, Inc, a leading US-based
full-service social media agency.

DMM is an award-winning social media marketing agency founded in 2010 by Luigi
Picarazzi. Headquartered in Los Angeles with a staff of over 200 employees,
the agency provides integrated social media strategy, management, creative and
influencer solutions, mainly to the US entertainment and video games sectors.
The Company's client base includes Hollywood movie studios, streaming
platforms, video games publishers, entertainment brands and public figures,
which DMM helps build and connect with their target audiences across all
social media platforms, with a focus on driving audience acquisition,
engagement, growth, conversion and retention.

The Company recently completed construction on an 11,000 square-foot
production studio that will allow it to create original social media content
and experiential activations that support their clients' marketing efforts.
It also comes with its proprietary software Creator Lab that allows it to
partner influencers with brands that have expressed affinity for a particular
game or entertainment property.

There is increasing convergence between the video games and media and
entertainment sectors, with more cross over of content and brands between the
two as well as greater commonality across the fandom and influencer space. DMM
is well positioned to benefit from this by deeply connecting with players and
fans across all social media platforms, bringing key skills and expertise in
an area where Keywords has identified strong demand from its clients. In
addition to its social media expertise, DMM brings experience in social and
short format video assets, complementing Keywords' longer, trailer format
content expertise, as well as award winning community management, YouTube
management, and content creator partnership services.

DMM will join Keywords' Engage service line which brings together experts from
its Marketing, Player Support, and Player Research units, and will be a key
building block in accelerating Keywords' vision of offering clients a holistic
marketing solution.

DMM, which is currently majority founder-owned, has grown rapidly in recent
years and in 2022, delivered revenues of approximately $34m and EBITDA of
approximately $8.5m. The terms of the transaction allow for initial
consideration of $67.5m, comprising $57.4m in cash and $10.1m in shares on
completion. There is also a maximum deferred contingent consideration of
$32.5m payable in a mix of cash and new ordinary shares dependant on the
future performance of the Company over the two years from completion.  The
cash component of the initial consideration will be funded by drawing down on
part of Keywords' existing €150m revolving credit facility. The new ordinary
shares to be issued will be subject to one-year lock in periods and orderly
market provisions for a further year.  Post-acquisition, Luigi Picarazzi
will continue to lead the business supported by his COO, Adam Reynolds.

Bertrand Bodson, CEO of Keywords Studios, commented:

"The acquisition of DMM brings Keywords a top tier social marketing agency,
world-class production location and capability, as well as a technology
platform that can help scale its influencer offering. It extends our
capabilities in an increasingly critical area of the marketing landscape,
 accelerating our progress towards being able to offer a truly holistic
solution to our clients' engagement needs. With the ever-increasing
convergence of entertainment and video gaming, we believe that delivering
DMM's social media marketing expertise to our clients will enable them to
enhance their engagement with their player base. We are looking forward to
working with Luigi, Adam and the broader DMM team as we continue to deliver
against our growth objectives."

Luigi Picarazzi of DMM, commented:

"We are excited by the opportunity to join Keywords, which will extend our
reach and support us in the next stage of our growth and development, building
on our successes to date. The combination of DMM's market-leading digital and
social media capabilities and Keywords' existing offering will provide a
compelling proposition across the combined, broader client base in both the
entertainment and video gaming sectors, which continue to converge. We are
excited to continue our journey together."

 

For further information, please contact:

 Investor Contacts:                                                         Media Contacts:
 Keywords Studios                                                           MHP Group

 Giles Blackham                                                             Katie Hunt / Eleni Menikou / Charles Hirst

 Director of Investor Relations                                             +44 20 3128 8794

 +44 7714 134 681                                                           keywords@mhpgroup.com (mailto:keywords@mhpgroup.com)

 gblackham@keywordsstudios.com (mailto:gblackham@keywordsstudios.com)
 Numis Securities

 Nominated Adviser & Broker

 Stuart Skinner / Will Baunton

 +44 20 7260 1000

 

This Announcement contains inside information for the purposes of the market
abuse regulation (EU No. 596/2014) as it forms part of United Kingdom domestic
law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR").

 

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

Keywords Studios is an international technical and creative services provider
to the global video games and entertainment industries. Established in 1998,
and now with over 70 facilities in 26 countries strategically located in Asia,
Australia, the Americas, and Europe, it provides services across the entire
content development life cycle through its Create, Globalize and Engage
service lines to a large blue-chip client base across the globe.

Keywords Studios has a strong market position, providing services to 24 of the
top 25 most prominent games companies. Across the games and entertainment
industry, clients include Activision Blizzard, Bandai Namco, Bethesda,
Electronic Arts, Epic Games, Konami, Microsoft, Netflix, Riot Games, Square
Enix, Supercell, TakeTwo, Tencent and Ubisoft. Recent titles worked on include
Elden Ring, Star Wars Jedi: Fallen Order, 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 DMM (https://digitalmediamanagement.com
(https://digitalmediamanagement.com) )

Founded in 2010 by CEO Luigi Picarazzi, Digital Media Management (DMM) is a
leading full service social media agency specializing in social-first,
"always-entertaining" marketing. DMM works with movie studios, television
networks, video games companies, streaming services and consumer brands to
create ground-breaking social media campaigns via fan activations, innovative
content creation, results-driven paid media planning, and strategic
influencer-brand partnerships.

 

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