Keywords Acquires US Game Developer and Mexico-based Dubbing Provider

Keywords Studios continues its aggressive pace in acquisitions, announcing two deals just one day apart. That makes it an average of 5-6 a year since listing in July 2013. This may be plenty for some companies, but not for Keywords. They commented in an analysts briefing earlier this year that they are targeting 4-10 acquisitions a year.

Sperasoft, a game developer, was acquired on December 13, 2017. Keywords paid USD 27m for this Californian company, which has a headcount of 400 software engineers and artists. Among Sperasoft’s clients are the big names of the gaming industry, including Electronic Arts, Ubisoft, Warner Bros and Riot Games.

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Sperasoft is expected to add USD 20m in revenues and USD 2m in adjusted EBITDA to Keywords in 2017. All of Sperasoft’s staff, including its three founders, will remain with the company and help Keywords “with its growth plans in Engineering Services and in developing the wider business within Eastern Europe.”

On December 15, 2017, Keywords announced the acquisition of Localizadora Latam SC (LOLA). The Mexican company provides dubbing, localisation and sound design services for the video game, film and television markets. LOLA counts among its clients Warner Bros and Ubisoft.

At a price tag of USD 1.03m, this was a relatively modest buyout from the two founders of LOLA. Keywords revealed in its press release that they were actually LOLA’s client, using them to complement its wholly owned local voice recording studio, Kite Team Mexico. Keywords says that Kite Team “will be integrated with…LOLA to create the market leading provider of services for Latin American Spanish localised video games.”

More notably, only USD 0.48m of the buyout will be paid in cash immediately. The balance is paid in new shares with a one-year lock-in period and another USD 0.35m over a 2-year period subject to LOLA meeting certain performance targets.

LOLA is expected to announce USD 0.25m in profits for their current financial year. It appears this was a win-win for Keywords; a high-quality supplier comes into their fold with future performance guarantees for the modest price paid.

For expert analysis and a full list of all deals covered on Slator including price, earnings or revenue multiples paid where available, sector, country, type, and more, download the Slator 2017 M&A Report.

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Lance Ng

Slator Contributor. Has been, at various times in his career, writer, translator, educator, banker, financial advisor and entrepreneur.