Devolver Digital acquires "highly successful" video game developer

(Alliance News) - Devolver Digital Inc on Wednesday said it has acquired Seattle-based developer System Era Softworks Inc for up to USD40 million.

The Austin, Texas-based video game publisher said the total consideration includes an upfront USD20 million cash payment, followed by USD2 million in cash and shares to be issued one year after the transaction closes.

Devolver will follow this up with USD10 million deferred consideration and a potential earn-out of up to USD8 million, both payable again in shares and cash.

Devolver said Seattle-based System Era is an "award-winning, multi-platform" developer with "expertise in creating quality, community-centred, long-life titles". It generated approximately USD7 million in revenue and USD3.8 million in adjusted earnings before interest, tax, depreciation and amortisation for the year ended June 30.

The acquisition includes System Era's "highly successful" debut game Astroneer, which Devolver said has generated over USD87 million gross revenue since its release in 2016 and achieved its highest annual unit sales figures in 2022.

"The thing that excites me the most about System Era is the cultural and strategic fit with Devolver," commented Chief Executive Officer Douglas Morin. "This is a highly experienced, talented group of developers...Their know-how in expandable games development opens up a new player-base and revenue stream for Devolver.

"We are looking forward to bringing the fun to new players in new, innovative ways - and above all welcoming the team to Devolver in coming days and months."

Devolver expects the deal to "contribute positively" to Ebitda in 2024.

Devolver Digital shares were up 2.0% at 26.00 pence in London on Wednesday morning.

By Emma Curzon, Alliance News reporter

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