- The video games services firm has accepted a £24.50 per share deal
- It represents a two-thirds premium to Keywords’ share price on 17 May
Keywords Studios has agreed to a £2.1billion takeover by Swedish private equity giant EQT.
The video games services business has accepted a £24.50 per share offer from the Stockholm-based investment group, which bought Dechra Pharmaceuticals back in January.
It represents a two-thirds premium to Keywords’ share price on 17 May, the final trading day before it confirmed talks were taking place with EQT, but £1 lower than an initial £25.50 approach made in May.
Offer: Keywords Studios has agreed to a £2.1billion takeover by private equity giant EQT
Headquartered in Dublin, the firm provides technical and creative services to many major video game makers, such as Microsoft, Ubisoft, Electronic Arts, Tencent, and Activision Blizzard.
These include producing trailers, voiceovers, sound mixing, visual effects work, and translating in-game text into dozens of languages.
It enjoyed an enormous uplift from the pandemic as onerous lockdown restrictions resulted in people spending more time indoors.
Since listing on the AIM market in 2013, Keywords has expanded considerably via acquisitions and organic growth, expanding revenues from €16.4million back then to €780.4million last year.
However, the group said on Wednesday that its ‘long-term potential’ has not been reflected in its shares, whose value has slumped over the past year amid concerns that artificial intelligence threatens its industry.
EQT believes that with the right added investment, it could ‘increase the pace of [Keywords] growth’ to help it become one of the world’s leading gaming services businesses.
It wants to broaden Keywords’ reach into ‘adjacent media and entertainment end-markets and fast-growing technologies.’
Jean Salata, chairman of EQT Asia, remarked: ‘As a private company under EQT’s ownership, Keywords Studios will be well positioned to make the long-term investments required for the transition to next-gen video gaming and for global expansion.
‘We plan to draw on our experience in the services and technology sectors to support management and invest further in innovation, talent, and M&A to accelerate Keywords Studios’ current strategy.’
Keywords was originally founded in 1998 by Giorgio Guastalla and his wife, Teresa Luppino, as a translation services provider to business software developers.
It eventually transitioned into a video game services firm, working on famous franchises like Fortnite, Assassin’s Creed, Pro Evolution Soccer, and The Legend of Zelda.
Its intended acquisition marks the latest blow to the London markets, which have suffered from an exodus of valuable companies in recent years.
Private security firm G4S, Hotel Chocolat, supermarket chain Morrisons, and fashion brand Ted Baker are just some of the names that have fallen into foreign ownership.
And in recent months, cybersecurity specialist Darktrace, Songs Fund, financial data group Preqin, and Royal Mail owner International Distribution Services have all struck billion-pound takeover deals.
Keywords Studios shares were 2.85 per cent up at £23.84 on Wednesday morning.
