26 June 2020

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

     Acquisition of Coconut Lizard

Strengthening the Game Development Service Line

Keywords Studios, the international technical and creative services provider to the global video games industry, today announces the acquisition of Coconut Lizard Limited ("Coconut Lizard"), a company providing specialised game development services, for a consideration of up to £2m. The acquisition furthers the Group's strategy to become the 'go to' technical and creative services platform for the global video games industry.

Based in Gateshead, United Kingdom, Coconut Lizard is a well-regarded provider of game development engineering services with particularly deep expertise in the video game development engine, Unreal Engine.  Importantly, in addition to expanding the Group's Game Development services, it brings strong access to game development talent including graduates from the specialised video game development and engineering degree courses at University of Sunderland and Newcastle University.

Coconut Lizard was founded by Robert Troughton, a veteran video games programmer who successfully built up a studio he founded before selling it to Epic Games in 2014. Coconut Lizard provides a range of services including game optimisation, game hardening, game porting and middleware integration for the Unreal Engine game development suite.  Its clients include Microsoft's Rare studio, where Coconut Lizard is providing a range of services to support and further develop the hit multiplayer game, Sea of Thieves.

For the year ended 31^st March 2020, Coconut Lizard generated revenues of over £1.5m and adjusted EBITDA of £0.35m. The business has added 10 developers to its team since January 2020 taking its current headcount to 29 with further growth expected during the year.

Keywords will pay non contingent consideration of £1.35m, comprising £0.99m in cash and the remainder through the issue of 19,739 new ordinary shares to the sellers, Robert Troughton and members of the wider team, on the first anniversary of completion.  The remaining consideration of up to £0.65m will become payable to the sellers, in a mixture of cash and shares, based upon performance targets for Coconut Lizard over the first 12 months post completion.

Andrew Day, CEO of Keywords Studios commented:

"We are delighted to welcome Robert and the team at Coconut Lizard to the Keywords family.  The Coconut Lizard team will bring further expertise in the Unreal Engine as well as access to talent to our wider team of around 1,000 people working across our Game Development studios internationally.

"Having recently successfully raised £100m in a placing, we are pleased to have completed our first acquisition despite the Covid-19 pandemic. 

"We expect to complete further acquisitions over the months ahead from the strong and attractive pipeline of opportunities that we are currently reviewing."

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 59 facilities in 21 countries strategically located in Asia, the Americas and Europe, it provides integrated art creation, marketing services, software engineering, testing, localization, audio and customer care services across more than 50 languages and 16 games platforms to a blue-chip client base of over 950 clients across the globe. 

Keywords Studios 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, Microsoft, Riot Games, Square Enix, Supercell, TakeTwo, Epic Games and Ubisoft. Recent titles worked on include Call of Duty: Black Ops 4, Mortal Combat X, Assassin's Creed Odyssey, Borderlands 3, League of Legends, Fortnite, Clash Royale and Rainbow Six Siege. Keywords Studios is listed on AIM, the London Stock Exchange regulated market (KWS.L).

About Coconut Lizard (www.coconutlizard.com)

Coconut Lizard is an unrivalled specialist in developing Unreal Engine games across all platforms including PC/Mac, and Console (PS4, Xbox One, Switch and many more).  The studio has grown rapidly since its foundation in 2015 and now employs 29 developers.  Coconut Lizard works hand in glove with game developers and publishers to deliver solutions including games performance and optimisation, platform porting, hardening and bug fixing, content analysis, middleware integration and consulting.