Keywords Studios PLC (LON:KWS) said it has acquired Maverick Media Limited, a video games creative marketing agency, in a deal worth up to £3.6mln.
The video game development services group said London-based Maverick had “little client overlap” with its other marketing studios, and as a result, the purchase will “further extend” its client relationships in the firm’s growing marketing services arm.
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Keywords added that Maverick’s “impressive track record” in TV commercials, live-action projects, video game trailers, key art and social media work will deepen its own range of marketing services and benefit its wider client base.
In what is the second acquisition following May's £100mln placing, the group will pay £2.4mln in cash alongside 13,579 new shares to the sellers for a combined £2.7mln of the purchase price. The remaining £900,000 will become payable in a mix of cash and up to 22,632 shares based on performance targets over the first six months post-completion of the acquisition.
For the year ended May 31, 2020, Maverick generated revenues of over £3.4mln and adjusted earnings (EBITDA) of around £1mln, with Keywords saying the firm was growing despite the challenges of coronavirus.
"We are delighted that Maverick and its talented team are joining Keywords Studios. Maverick is a strong brand with a 25-year body of work in servicing video games publishers and developers and has grown successfully with the industry. We are excited about the expertise that Maverick will bring to our wider marketing business and ultimately to our client base across the group”, said Keywords chief executive Andrew Day.
He added that Keywords still had a "healthy pipeline of further acquisition opportunities" which the board is "reviewing and advancing".
In a note on Thursday, analysts at broker Shore Capital reiterated their ‘buy’ rating on the stock, saying Keywords was well placed and well funded to continue its growth strategy and that the company is positioned to benefit from “the resilience of the video games industry” during the pandemic.
“We believe that KWS has a promising operating outlook within an attractive, growing, sector”, the broker concluded.
Shares in Keywords were steady at 2,250p in mid-morning trading on Thursday.
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