26th Jun 2020 10:13
(Alliance News) - Keywords Studios PLC on Friday said it has acquired video game development services company Coconut Lizard Ltd for up to GBP2 million in cash and shares.
Keywords provides technical services for the video games industry and has its headquarters in Dublin, Ireland. It explained that the acquisition forms part of a "strategy to become the 'go to' technical and creative services platform for the global video games industry."
Coconut Lizard is based in Gateshead in the UK and has "particularly deep expertise" in video game development engine, Unreal Engine. The acquisition gives Keywords access to "game development talent" that includes graduates from the University of Sunderland and Newcastle University's video game development and engineering degree courses.
The newly acquired firm was founded by video games programmer Robert Troughton, who founded a studio that he sold to Epic Games in 2014.
Coconut Lizard provides services such as game optimisation with client's including Microsoft Corp's Rare studio, Keyword noted.
In the year ended March 31, Coconut Lizard generated more than GBP1.5 million of revenue and adjusted earnings before interest, tax, depreciation, and amortisation of GBP350,000.
Keywords will make a non-contingent payment of GBP1.4 million for Coconut Lizard, GBP990,000 in cash and the rest through the issue of 19,739 shares. The remaining up to GBP650,000 is payable provided performance targets are met over the first 12 months after completion.
Andrew Day, chief executive at Keywords, said: "We are delighted to welcome Robert and the team at Coconut Lizard to the Keywords family. The Coconut Lizard team will bring further expertise in the Unreal Engine as well as access to talent to our wider team of around 1,000 people working across our Game Development studios internationally.
"Having recently successfully raised GBP100 million in a placing, we are pleased to have completed our first acquisition despite the Covid-19 pandemic.
"We expect to complete further acquisitions over the months ahead from the strong and attractive pipeline of opportunities that we are currently reviewing."
Shares in Keywords were up 1.3% at 1,838.00 in London in morning trading.
By Anna Farley; [email protected]
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