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(Sharecast News) - Video games company Team17 has agreed to acquire the business and assets of StoryToys, it announced on Friday, via the acquisition of its parent company TouchPress.
The AIM-traded firm said StoryToys is a developer and publisher of educational entertainment, or 'edutainment', apps for children, with the acquisition set to establish a new vertical for Team17.
It said the initial consideration would be $26.5m (£19.26m), with a further maximum $22.5m payable in cash on the delivery of certain targets by the vendors within three years.
The acquisition would be funded from Team17's existing cash reserves.
Team17 said its ambition was to grow StoryToys to be the "global number one" children's edutainment brand for ages eight and under.
The acquisition was expected to be immediately earnings accretive, generate returns well above the cost of capital, and while smaller in scale, deliver margins and cash generation approaching the levels of Team17.
"I am thrilled to be welcoming StoryToys into the Team17 family and believe our shared culture and values perfectly align," said chief executive officer Debbie Bestwick.
"In StoryToys, we are acquiring a highly creative and successful team whose ability to both entertain and educate children is truly best in class.
"Their track record is without question but the depth of talent that exists within the business gives us an unrivalled position within a hugely exciting and high growth edutainment area."
Bestwick said Team17 would be able to support StoryToys' "ambitious" growth prospects and provide a strong platform to accelerate its development.
"Team17 prides itself on its culture and on embracing ambitious management teams - today's announcement is an example of how we intend to make that a reality."
At 0927 BST, shares in Team17 Group were up 3.84% at 758p.
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