Keywords Studios Plc Regulatory News (KWS)

9 April 2018

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

Acquisitions of Cord Worldwide Limited and Laced Music Limited from Cutting Edge Group

Acquisition of Maximal Studio 

Extending the Group's Audio services line; adding Music Services and Audio services in Brazil

Acquisitions of Cord Worldwide Limited and Laced Music Limited

Keywords Studios, the international technical services provider to the global video games industry, today announces that it has acquired Cord Worldwide Limited ("Cord") and Laced Music Limited ("Laced") for a total consideration of £4.5m from the Cutting Edge Group ("Cutting Edge").

Based in London, Cord provides a range of music focused branding and strategic consulting services to large businesses including Shell, Lego and BT and Laced is a music services company and record label specialising within the video games industry.

The acquisitions of Cord and Laced are in line with Keywords' strategy to grow organically and by acquisition as it selectively consolidates the highly fragmented market for video game services. The companies will bring additional talent, expertise and music industry experience to Keywords' client base. Laced and Cord will continue to collaborate with Cutting Edge, and will be able to take the extensive catalogue of media music rights that Cutting Edge own to Keywords' global client base of video game developers and publishers. Being able to offer music services to our clients will further enhance our reputation as the leading provider of services to the global video games industry.

Cord and Laced generated combined revenue of £6.5m and EBITDA of £675,000 in the year ended 30 June 2017.

Under the terms of the acquisition Keywords paid cash consideration of £3.375m on completion and will issue 73,744 in shares two years after the acquisition.

Acquisition of Maximal Studio

On 22nd March 2018, Keywords acquired Maximal Studio ("Maximal"), an audio studio in Sao Paulo which provides voice over recording for the video games and learning industries (e.g. e-books) for an initial cash consideration of €0.3m, with up to €0.2m of deferred consideration due over the following two years, subject to its performance.

The acquisition adds further scale to our audio capabilities in the South American markets, providing us with our first recording studio in Sao Paulo to complement our localisation business in Rio.

Andrew Day, CEO of Keywords Studios commented:

"Thus far, our Audio service line has specialised entirely on voice over production for video games, yet video games publishers/developers are major buyers of specifically composed or licensed music for use in games, are increasingly focussed on using music assets as part of their brand or franchise identity and are becoming more sophisticated about how they buy and manage their music assets.

"We are, therefore, delighted that we will be able to add further value to our games clients through Laced's specialism in licencing video game soundtracks for game companies and from music composers, and Cord's expertise in music composition, rights management, music strategy consulting and audio branding.

"We also see a clear opportunity to bring our localisation, voice over and trailer creation capabilities to Cord's broader client base of leading brands.

"We look forward to welcoming the talented and passionate teams of Cord and Laced to the Keywords family and to developing further the synergies that we have already proven through working collaboratively on recent projects."

Daniel Jackson, CEO of Cord commented:

"The opportunity to add a brand new Music capability within the Keywords Studios platform is very exciting for us. Keyword's clients will now be able to use the full power of music to connect with players; linking in-game experiences to trailers, merchandise and live events. With CORD's focus on music strategies, we hope to change the way music is created, owned and leveraged within the gaming industry."

Danny Kelleher, Managing Director of Laced commented:

"We are thrilled to join Keywords and look forward to working alongside their studios all over the world and the new opportunities that will bring us. The services that we currently offer to games developers such as music strategy and supervision, talent and brand partnerships will now be available to Keywords extensive client list. The Laced Records label will continue to grow and offer the most exciting gaming soundtracks catalogue available."

For further information, please contact:

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 over 40 facilities in 20 countries strategically located in Asia, the Americas and Europe, it provides integrated art creation, software engineering, testing, localisation, audio and customer care services across more than 50 languages and 16 games platforms to a blue-chip client base of approximately 650 clients across the globe. It has a strong market position, providing services to 23 of the top 25 most prominent games companies, including Activision Blizzard, Bandai Namco, Bethesda, Electronic Arts, Konami, Riot Games, Sony, Square Enix, Supercell, TakeTwo, and Ubisoft. Recent titles worked on include Uncharted 4: A Thief's End, Call of Duty: WWII, Mortal Combat X, Assassin's Creed Origins, Battlefield 1, League of Legends, Fortnite, Clash Royale, and Mobile Strike. Keywords Studios is listed on AIM, the London Stock Exchange regulated market (KWS.L). 

About Cord Worldwide (www.cordww.com)

Established in 2009, CORD is a music agency working in branding and advertising. CORD's services include music strategy, supervision, composition, sonic branding and talent management. From our offices in London, Madrid and Warsaw we service clients including LEGO, BT, VISA, Santander and Mr Porter. 

About Laced Music (www.lacedrecords.com)

Established in 2015, Laced is a music services company and record label working within the video games industry. Laced provide music strategy, supervision and talent partnerships. We work with some of the most exciting developers and publishers to ensure their game's music connects with players and creates an unforgettable experience. Laced Records license, manufacture and release some of the best video game soundtracks worldwide with a focus on premium vinyl collector box-sets.

About Maximal Studio (www.maximalstudio.com.br)

Founded in 2011, by audio production veterans, Maximal provides high quality audio services for the localisation of video games in Brazilian Portuguese as well as other recording and sound design services. It has worked on over 100 video games titles, with a focus on AAA games such as Rise of the Tomb Raider, Halo 5 Guardians, and Epic's Paragon.