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Keywords Studios buys California-based Blindlight for up to $10m
Keywords Studios has bought video games services provider Blindlight for up to $10m from its founder, Lev Chapelsky.
Under the terms of the deal, Keywords is paying an initial $3.64m in cash and will issue 64,521 new ordinary shares to the seller on the first anniversary of the acquisition, which will then be subject to orderly market provisions for a further 12 months. There is also a deferred consideration of up to $4.8m payable to the seller in cash depending on the performance of the business in the 12-month periods to the first and second anniversaries of the acquisition.
Based in Hollywood, California, Blindlight works on behalf of game publishers and developers in procuring specialised talent and managing the entire production processes for the parts of games that benefit from Hollywood production resources. It works with companies including Sony Interactive Entertainment and Ubisoft.
Blindlight achieved earnings before interest, taxes, depreciation and amortisation of an average $1m a year over the three-year period to the end of December 2017.
Chief executive officer Andrew Day said: "Keywords and Blindlight have got to know each other well over the past three years and we see good opportunities to leverage both businesses to offer a wider range of world leading services to our clients. We are delighted to welcome Lev and the rest of the team to the Keywords family.
"Following our recent acquisition of music services companies, Cord Worldwide and Laced, we see excellent opportunities for Blindlight to bring these services to Los Angeles, as well as providing access to further opportunities for our downstream production services of translation and localised voice over."
Numis, which rates the stock at 'buy', said the acquisition of Blindlight gives the wider Keywords business much better ability to access Hollywood talent to help its customers in their production of games and game-related materials. The brokerage added 1.6% to its 2019 earnings per share forecasts and said its unchanged 2,180p price target is based on a scenario analysis for organic growth and acquisitions out to 2022.
At 0910 BST, the shares were up 0.9% to 1,824p.