29 July 2016

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

Acquisition of Volta

-      Service Extension into Concept Art and further increases scale of services to the  Art creation market

Keywords Studios, the international technical services provider to the global video games industry, today announces that it has acquired the entire equity share capital of Volta Creation Inc.  ("Volta") for a total consideration of CAD$5.25 million from parent company Frima Studio Inc. ("Frima"). Volta is based in Quebec City and provides outsourced art creation services to the video games industry with a particular emphasis on concept art.

The acquisition of Volta is in line with Keywords' strategy to develop its art services line by adding additional capabilities and capacity, and will move Keywords further upstream in the game development cycle.  Volta provides concept art for video game developers at the very early, creative design phase of games helping to set the look and feel of the game. Concept art is used in the art asset production phase of development as reference material for the production artists. As such, the work that Volta undertakes will also fit well with the asset production services of the Group's other art studios, Lakshya, Liquid Development and Mindwalk.

Volta was founded in 2006 by Claude Bordeleau and currently employs 25 people in its studio in Quebec City, whilst also managing a long established network of 100 freelance artists enabling it to supply leading game companies around the world with high quality art including Capcom, Electronic Arts, Machine Zone and Nexon. In the year ended 31 December 2015, the Volta business generated revenues of CAD$3.6m and underlying pre-tax profit of $0.7m. Volta was also in the early stages of establishing a studio in Singapore but this will now be merged with Keywords' studio in Singapore. Keywords will be able to leverage its existing facility in Montreal to provide and support functions of HR, finance, IT and general management to Volta's studio in Quebec City.

Under the terms of the acquisition, which is expected to be earnings enhancing during 2016, Keywords is paying a total consideration of approximately $5.25 million for 100% of the share capital of Volta. This is being satisfied by CAD$5.0m payable in cash to Frima, $0.3m of which is deferred for between 3 and 18 months, subject to working capital and other adjustments. The remainder is being satisfied by the issue of 45,192 new ordinary shares in Keywords, which will be held by Claude Bordeleau subject to a lock in period of 2 years. The acquisition is being funded by Group resources including the recent rolling credit facility of up to €15m from Barclays.

Application has been made to the London Stock Exchange for the admission of 45,192 new ordinary shares to trading on AIM. Admission of the new shares is expected to take place at 8.00am on 3 August 2016. The Company's total issued share capital following admission will consist of 53,938,397 ordinary shares of one pence each with one voting right per share. The above figure of 53,938,397 may be used by shareholders as the denominator for the calculations by which they can determine if they are required to notify their interest in, or a change to their interest in, the Company following admission.

The Company confirms that it will be issuing a trading update for the six months ended 30 June 2016 on 2 August 2016.

Andrew Day, Chief Executive of Keywords, commented:

"The acquisition of concept art specialist, Volta, takes our art service line even further upstream in the game development cycle providing access to creative decision makers and game producers in the earliest phases of the game lifecycle and enabling us to create synergies with our later stage art services.   

 "We are delighted to be able to welcome Volta's highly talented staff and freelance collaborators to the Keywords family and we look forward to working closely together to build upon Volta's excellent reputation and loyal client base."

Claude Bordeleau, CEO of Volta commented:

"We are delighted to be joining the Keywords Group with its growth ambitions and focus on providing high quality essential services to the video games industry. We believe that Volta has a very exciting and valuable role to play within the Group's Art Services business and we look forward to working with our new colleagues around the world to widen our service offerings to existing and new clients."

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 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 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 20 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 Volta (www.volta.ca)

Volta is a leading visual development studio dedicated to creating high-end 2D and 3D visuals, as well as cinematics for video games. Established in Quebec City in 2006, Volta's veteran team has delivered hundreds of projects to the world's most celebrated video-game companies. Services include concepts for characters, environments and vehicles, production art pipeline support, marketing art and a full range of 3D and cinematic services.