Keywords Studios Plc Regulatory News (KWS)

17 November 2016

Keywords Studios plc ("Keywords", "the Group")

Acquisition of Enzyme Testing Labs

- Strengthening the Group's testing capabilities

Keywords Studios, the international technical services provider to the global video games industry, today announces that it has acquired Global Video-Games Services Inc. ("GVGS") together with its subsidiary companies including its principal trading entity, Enzyme Testing Labs Inc. ("Enzyme Testing Labs") (together "Enzyme") from its founders, Yan Cyr and Emmanuel Viau and Fonds d'Investissement de la Culture et des Communications (FICC) (the "Sellers").

Under the terms of the acquisition, which is expected to be earnings enhancing, Keywords Studios is paying the sellers and settling the financing obligations of FICC to a total of CAD$5.4m. This is being satisfied by the payment of CAD$4.9m in cash to the Sellers and CAD$0.5m to FICC in repayment of loans advanced to GVGS. This will be funded from the Group's existing cash resources.

Founded in 2002, Enzyme is one of the most recognised technical services brands in the video games industry. The consolidated, audited accounts for the year to 31 December 2015 show revenue of CAD$11.5m and profit before interest and tax of CAD$1.3m. Net assets at closing after adjusting for the loans being repaid are estimated to be CAD$2.3m.

Based in Montreal and St-Jérôme (60 km from Montreal) and with an office in Kawasaki near Tokyo, Enzyme's strengths are in Functional and Localisation Testing of video games for leading game publishers and developers. In addition, it provides Localisation Services and Focus Group Testing; the latter fitting well with recently acquired Player Research. Combining Enzyme with Keywords will significantly increase Keywords' Functional Testing capacity (which accounted for 8% of Group revenue in the first half of 2016) and provide significant operational synergies within the Group. The business will be integrated into Keywords during the course of 2017 and we anticipate the resulting synergies will deliver significant margin improvement.

Andrew Day, Chief Executive of Keywords Studios, commented:

"The acquisition of Enzyme brings together two of the leading video games testing providers, reinforcing Keywords' position as the market leader in the field, with testing operations in Montreal, St-Jérôme, Seattle, Tokyo, Singapore, New Delhi, Milan and Dublin.

"The acquisition will not only generate considerable cost synergies but it will provide greater scale, flexibility and breadth of services for our combined interactive media clients globally.

"We warmly welcome Enzyme's highly talented and passionate employees to the fast growing Keywords Studios family as we work together to deliver the highest quality, cost effective services to our clients around the world."

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Ends

Certain information contained in this announcement would have constituted inside information (as

defined by Article 7 of Regulation (EU) No 596/2014) prior to its release as part of this announcement.

About Keywords Studios (www.keywordsstudios.com)

Keywords Studios is an international technical services provider to the global video games industry. Established in 1998, and now with facilities in Dublin, Rio de Janeiro, Montreal, Quebec City, Portland, Mexico City, Los Angeles, Seattle, Tokyo, Singapore, New Delhi, Pune, Rome, Milan, Barcelona, Madrid, Taipei, Shanghai, Beijing, Manila, Hamburg, Paris, Brighton and London, it provides integrated art creation, localisation, testing, audio and customer care services across 50 languages and 14 games platforms to a blue chip client base in more than 15 countries. It has a strong market position, providing services to 21 of the top 25 most prominent games companies, including Microsoft, Supercell, King, Bandai Namco, Sony, Konami, Electronic Arts, 2K, and Square Enix. Recent titles worked on include Tom Clancy's The Division, Halo 5: Guardians, Batman: Arkham Knight, Street Fighter V, Rise of the Tomb Raider, Clash Royale, Mobile Strike. Keywords is listed on AIM, the London Stock Exchange regulated market (KWS.L). 

About Enzyme (www.enzyme.org)

Enzyme Testing Labs Inc. was founded in 2002 and is based in Saint-Jérôme, Canada with additional office locations in Montreal, Canada and Kawasaki, Japan. From AAA projects to casual mobile titles, Enzyme provides testing services on all platforms for the video-games industry. Those services include functionality testing, localisation testing, compliance testing, compatibility testing, connectivity testing and multiplayer network performance services, as well as focus groups and usability testing. Enzyme also provides localisation and multilingual customer support services.