Keywords Studios PLC (LON:KWS), the rapidly growing video games ancillary services group, is poised for its largest acquisition so far.
A deal has been agreed to buy North America-focused VMC Consulting for US$66mln, an acquisition Keywords expects to be ‘significantly earnings enhancing’ almost immediately.
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An underwritten placing to raise about £75mln will fund the deal with the shares to be sold through a book build exercise, the company said in a statement on Tuesday.
Through a network of vetted private individuals VMC is one of the leading video games beta testers and offers many cross selling and roll-out opportunities, said Keywords.
Adjusted revenue of the US group in the year to October was US$57.4mln and underlying profits [adjusted EBITDA] an annualised US$6.4 mln.
VMC will more than double Keywords' customer support operation in the North American market as well as growing market share and footprint.
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Andrew Day, Keywords’ chief executive, added VMC was a significant step in its consolidation of the fragmented video games services sector.
"VMC is an organisation we've admired for several years for its reputation, scale and high quality service as well as its attractive embedded technical services and crowd-based testing services.
"With secure testing labs in Seattle and Montreal, very close to Keywords own studios, we expect to be able to leverage the strengths of both organisations while achieving significant cost synergies to deliver profit performance similar to that of the rest of the group.”
Shares in Keywords rose 3.3% to 1,426p, adding to a near 200% rise so far this year.