Swedish investment firm EQT has struck a deal to acquire Keywords Studios for $2.8 billion as revealed by a post on the London Stock Exchange.
The prolific game service provider is known for assisting with development, art production, localization, quality assurance, marketing, and more. It also confirmed the massive deal will value each Keywords Studios share at roughly $31.
Keywords Studios Acquisition Deal
(Photo : Keywords Studios / Screenshot taken from official website)
The statement on the London Stock Exchange read that the boards of Bidco (EQT) and Keywords Studios have reached an agreement. This was on the terms of a recommended cash acquisition of the entire issued and to be issued ordinary share capital of Keywords Studios by Bidco.
It added that the acquisition is to be effected by means of a scheme of arrangement under Part 26 of the Companies Act.
The deal values the entire issued and to-be-issued ordinary share capital of Keywords Studios at roughly $2.7 billion on a fully diluted basis and "implies an enterprise value of approximately $2.8 billion," according to GameDeveloper.
The investment firm will finance the acquisition agreement with a mix of equity capital and debt financing and is expected to complete it in the fourth quarter of this year.
The deal comes as Keywords Studios' chairman of the board, Don Robert, said that the company will benefit from EQT's operation expertise and deep industry network.
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He also claimed that the Swedish investment firm will "provide a good home for our valued employees as they continue building trusted partnerships with our customers."
Robert said that while the board expects the continued execution of the studio's strategic objectives it is also mindful of the near-term challenges it could face.
These come on top of other longer-term uncertainties that have resulted in volatile returns for Keywords Studios' shareholders over the last 15 months.
He noted that the board believes that the acquisition deal represents a good opportunity for them to realize value for their investment in cash upfront at a significant premium.
Valuing the Deal at $2.8 Billion
The deal also comes as shares in the video game services provider have been under pressure due to the threat that AI poses. However, the 67% premium from EQT suggests that the investment firm thinks the potential of AI is overblown, said the Financial Times.
The slowdown that Keywords Studios has experienced has more to do with video game makers pushing development budgets into the future rather than with AI technology. Last year was relatively more difficult with the U.S. writers' strike putting big productions on hold and slowing organic growth to just 6%.
Keywords Studios CEO Bertrand Bodson also spoke following the announcement of the acquisition deal. He said that he was extremely proud of their passionate world-class teams as well as the leading technology-enabled global platform that they were building.
He argued that this has enabled them to develop innovative solutions while also fostering strategic partnerships with their clients. Bodson also said that they have consistently delivered strong financial performance and created significant value for their shareholders, according to GamesIndustry.
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