Video games services provider Keywords Studios (LON:KWS) has purchased animation and digital design company Spov for about £1.2mln in cash.
AIM-listed Keywords said the acquisition of Spov will “strengthen our market position” as a provider of digital art services and will contribute to its continuing growth in this area.
Spov, based in London, provides creative development, cinematics, user interface, visual effects and motion graphics services to the video game and film sectors. The company was founded in 2007 by Allen Leitch and has worked on big titles including ‘Mission Impossible: Rogue Nation’, ‘Watch Dogs’, ‘The Division’, ‘Call of Duty: Advanced Warfare’; ‘Batman: Arkham Knigh’t and Marvel's ‘Doctor Strange’.
Shore Captial analysts said: "We believe further small acquisition opportunity arise for Keywords to broaden current offerings, in addition to bigger deals to bring new technical competencies."
In a trading statement earlier this month, Keywords said it expects its full year pre-tax profit to beat analysts’ expectations on the back of recent acquisitions.
The star performer was new addition Synthesis, an audio and localisation business, which was acquired last April for €18mln.
Keywords also acquired six other businesses in 2016 – Ankama, Mindwalk, Volta, Player Research, Enzyme and Sonox – which it said all had a positive impact. It also bought the remaining 50% of Kite Team it didn’t already own.
The company paid out €20.7mln in cash for these acquisitions. At the end of the year, Keywords still had €17mln in the bank and had used €8mln of its €15mln rolling credit facility.
Chief executive Andrew Day said the strong cash generation and the available debt facilities meant the group has the headroom required to make further purchases.
Shares rose 0.89% to 626.50p in early trading.
-- Adds broker comment, updates share price --