22 April 2021

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

Acquisition of Climax Studios Ltd ("Climax Studios" or "Climax")

Brings significant additional scale to Keywords Studios' Game Development Service Line

Keywords Studios, the international technical and creative services provider to the global video games industry, today announces that it has acquired the entire issued share capital[1] of Climax Studios, a UK based provider of game development services to the video games industry, for a total consideration of up to £43m. The acquisition will bring significant additional scale to the Group's largest service line, Game Development, and further the Group's strategy to become the 'go to' technical and creative services platform for the global video games industry.

Founded in 1988 and based in Portsmouth, Climax is one of the longest established game development businesses in the UK.  The studio's talented team of 109 staff, led by CEO Simon Gardner, provides full game development, co-development, porting and technical consulting services to some of the world's largest games publishers including Sony, Microsoft, 2K, Codemasters and Electronic Arts.  Climax has worked on original games and co-development projects across all genres and platforms, including on recent titles such as Silent Hill: Shattered Memories, Crackdown 3 and Returnal PS5. 

In recent years, Climax has grown impressively: it recorded an adjusted EBITDA of c.£4.3m in the year ended 31 December 2020 and growth has continued in the current financial year.  Under the terms of the acquisition, Keywords will pay a maximum consideration of up to £43m, comprised of an initial consideration of £20.2m in cash and the equivalent of £6.8m in new ordinary shares. Deferred consideration of up to £16m, in a mix of cash and new ordinary shares, will be payable based on growth targets being met over the year following completion.  The new ordinary shares to be issued as part of the initial consideration and the deferred consideration are subject to one-year lock-in periods and orderly market provisions for a further period. 

[1] The vendors were Hyperion Capital Limited (82.5%), Simon Gardner (15%) and James Sharman (2.5%).

Jon Hauck, Joint Interim CEO of Keywords Studios, commented:

"We are delighted that Simon and the highly talented Climax team are joining the Keywords family.  Climax brings a wealth of expertise, adds significant scale to our rapidly growing Game Development Service Line, and provides access to a new pool of talent from its base in Portsmouth. 

"The studio's excellent track record of high quality delivery spans over 30 years, with its services in high demand from some of the largest names in the industry.  We are very excited about the experience and opportunities that Climax will bring to Keywords, and our clients, and we look forward to enabling their continued growth as part of the Group."

Simon Gardner (Climax CEO) further commented:

"We are very excited about joining Keywords and the opportunities that being part of an industry leading global business will open up to our clients and our team. 

"Keywords Studios shares our growth ambitions and their investment will support the delivery of a wider range of top quality services and products to our clients.   We are looking forward to working closely with everyone at Keywords and to start playing our part in the impressive journey of the wider business."

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 65 facilities in 22 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 Cold War, Anthem, Star Wars Jedi: Fallen Order, Assassin's Creed Valhalla, Valorant, League of Legends, Fortnite, Clash Royale and Doom Eternal. Keywords Studios is listed on AIM, the London Stock Exchange regulated market (KWS.L).

About Climax Studios (www.climaxstudios.com)

Climax Studios is a long established games studio based in Portsmouth, UK and has been making games for over 33 years. Whilst it has produced award winning games on all platforms and genres during its long history, it has most recently focused on co-development and technical code support for leading games publishers around the world. The studio has contributed creative content for a number of new console titles, carried out platform porting and game optimisation work and has become a world leader in implementing extensive accessibility features alongside publisher teams.