RNS Number : 4761B
Keywords Studios PLC
07 January 2015
 

7 January 2015

 

 

 

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

 

Acquisition of Alchemic Dream Inc

Services extension into Customer Support for video games

and

Acquisition of Reverb Localização - Preparação de Documentos Ltda.

Geographic Expansion in South America

and

Trading Update

 

Keywords Studios, the international technical services provider to the global video games industry, today announces the acquisition of Alchemic Dream Inc. ("Alchemic Dream"), a well-established provider of multi-lingual customer support services for the video games industry internationally for a total consideration of up to CAD$1.25m

 

In addition, Keywords has completed the acquisition of Reverb Localização - Preparação de Documentos Ltda. ("Reverb") for a total cash consideration of up to €300k.

 

The acquisitions are in line with Keywords Studios' strategy of growing both organically and by acquisition to extend the Group's client base, market penetration or service lines, where the Group can use its existing expertise, multi-service platform, scale and global reach to generate synergies.

 

Founded in 2001, Alchemic Dream is a well-known brand in the video games industry for cost effective and flexible customer care services.  Based in Shawinigan near Montreal, Canada where it employs 38 people, it also works with remote collaborators in 36 countries.  The acquisition provides Keywords Studios with an entry point into the fast growing market for community management services, either within the game, in the game forums or within the wider social media channels.  The demand for live operations support services designed to ensure players continue to engage with the game for longer is expanding due to the transition from games as a packaged product, sold through traditional retail stores, to games as a service for mobile, online, or console games.  

 

Under the terms of the acquisition, which is expected to be earnings enhancing in the first year of ownership, Keywords Studios has agreed to pay the sellers of Alchemic Dream a maximum total consideration of CAD$1.25m for 100% of Alchemic Dream dependent on certain closing balance sheet related adjustments.  The consideration is to be satisfied in cash.

 

Alchemic Dream's management accounts for the 10 months to 31 October 2014 show the business achieved revenues of CAD $4.33m and profits before tax of CAD $480k.  The accounts for the year to 31 December 2013 show it achieved revenues of $3.7m, a loss before tax of $220k and it had net assets of $0.48m including net debt of $0.2m.

 

Alchemic Dream's know how and expertise in managing communities of gamers for leading online and mobile game operators across all forms of social media, within the games themselves and on the official game forums will be used as a platform from which to develop customer care services throughout the Group internationally.

 

Reverb was founded in 2012 and is based in Rio de Janeiro.  Its small team of 5 employees and its freelance collaborators have established a solid reputation providing localisation and audio management services for Brazilian Portuguese for some leading games including World of Warcraft and Magic the Gathering.  This will be Keywords' first office in South America where computer games are growing fast.  The market in Latin America is predicted to grow at a compound annual growth rate of 13% from $3bn in 2013 to $5.1bn in 20181.

 

Trading and Market Update

 

As anticipated, the second half of the Group's financial year has seen Keywords supporting many game titles where the anticipated release dates fall in the first three months of 2015.  We have made good progress with the introduction of Keywords' operational efficiency to our recently acquired businesses and have seen strengthened demand for our higher margin services in the second half.  As a result, we expect the outturn for the full year to be in line with expectations.

 

The games market as a whole continues to develop strongly with the rejuvenation of the console market as some developers refocus on the console game sector and Microsoft and Sony actively solicit independent games developers to develop titles for their new consoles.  In particular, we welcome the launch during September of the Xbox One by Microsoft into 28 territories which were omitted from the initial launch in November 2013 and the opening of the Chinese market to the sale of video game consoles for the first time; this will help to drive a proliferation of content and territories and will serve us well as developers seek to maximise revenues by localising games to increase their target audiences.

 

Andrew Day, Chief Executive of Keywords Studios, commented:

"The acquisition of Alchemic Dream provides us with an important point of entry into the increasingly important market of customer care services for the video games industry.  Our ability to offer a full range of gamer support services by leveraging our highly committed pool of 1,500 game specialists spread across 12 locations and 3 continents will be a huge asset.  The systems, knowledge and experience of Alchemic Dream will allow us to greatly accelerate our otherwise organic growth in this arena.

"Adding customer care and community management to our offering allows us to provide services to our clients through all stages of the video game life cycle from conception through to live operations.  With changing monetisation models which rely on keeping players engaged in the game for as long as possible high quality customer care has become an essential part of the game experience.  Dealing in a professional manner and in the language of video games with varied issues such as helping players to reach the next level, intervening in cases of online bullying, understanding and resolving in-game bugs, representing the game operator on social media platforms is a service which protects the clients' brands and adds value through increased consumer spend.

"We are also pleased to be announcing our first investment in the fast developing game economy in Brazil.  Brazilian Portuguese has risen to take its place in our top 5 languages alongside the more established languages of French, Spanish, German and Italian.  The acquisition of Reverb provides us with a small but high quality foothold in this important growth market and we expect to be able grow our revenues and improve our margins for this language as a result.

"We warmly welcome our new colleagues at Alchemic Dream and Reverb to the fast growing Keywords group and look forward to working with both businesses to integrate them fully into the Group to strengthen and broaden the services we can offer to our clients globally."

Ends

1 Source: International Development Group, Latin America, An Inside Look Into One of the Biggest Opportunities in Video Games, November 14, 2014.

For further information, please contact:

 

Keywords Studios (www.keywordsstudios.com)

Andrew Day, Chief Executive Officer

Andrew Lawton, Chief Financial Officer

+353 190 22 730

 

Numis (Financial Adviser)

Stuart Skinner / Kevin Cruickshank  (Nominated Adviser)

James Serjeant (Corporate Broker)

 

020 7260 1000

 

MHP Communications (Financial PR)

Katie Hunt / Vicky Watkins

 

 

020 3128 8100

About Keywords Studios (www.keywordsstudios.com)

 

Keywords Studios is an international technical services provider to the global video games industry.  Established in 1998, and with facilities in Dublin, Montreal, Seattle, Los Angeles, Tokyo, Singapore, New Delhi, Rome, Milan and London. It provides integrated localisation, testing and audio services across 40 languages and 12 games platforms to a blue chip client base in more than 15 countries. It enjoys a leading market position, providing services to 21 of the top 25 most prominent games companies listed by Gartner1, including Microsoft, Namco Bandai, Konami, Sony, Electronic Arts and Square Enix. Key recent titles it has worked on include NBA 2K15, Middle-earth: Shadow of Mordor, Forza Horizon 2, Diablo III: Reaper of Souls Ultimate Evil Edition, Clash of Clans and Minecraft. Keywords is listed on AIM, the London Stock Exchange regulated market (KWS.L). For further information, please visit: www.keywordsstudios.com.

 

 

About Alchemic Dream (www.alchemicdream.com)

Pioneers and leaders for over ten years, Alchemic Dream has been the premier international provider of services for companies that publish and develop massive multiplayer online games, virtual worlds, social games, casual games, mobile games and transmedia content. The company also provide services to online payment and virtual goods providers. Alchemic Dreams works with some leading operators of Massive Multiplayer Online Games, mobile and other online games. The services offered include localisation, customer support, forum moderation, game mastering and risk management.

About Reverb (www.reverblocalization.com)

 

Reverb Localization is a game localization company located in Rio de Janeiro. With highly qualified translators and high end computer assisted translation tools (CAT), the company offers high quality translation & localization services for international clients. In addition to in-house translators, Reverb has a freelancer pool of seasoned professionals, ready to deliver amazing content in time-sensitive scenarios. Amongst others, Reverb has worked on such well known games as Magic the Gathering, World of Warcraft, Diablo III, StarCraft II: Heart of the Swarm, and Hearthstone: Heroes of Warcraft.

 


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