Video game services provider Keywords Studios (KWS:AIM) has just announced its largest acquisition to date. It is buying VMC Consulting and Volt Canada in a combined deal from Volt Information Scientists.
It will pay around $66.4m (£50.4m approx) for the pair.
To fund the deal Keywords has raised roughly £75m by issuing around 5.36m new shares, priced at £14.00 per share. It's worth noting that the placing price represents a small premium to yesterday's £13.87 close, demonstrating the strength of support among investors for the new funding and purchase.
The share price has been egged higher still in open trading on Tuesday, nudging a little more than 4% up to £14.44.
The company is using a cashbox placing which Shares wrote about regarding RWS’s (RWS) proposed acquisition recently.
WHAT WILL VMC ADD?
Testing and customer support in North America is the main benefit to Keywords. North America customer support scale will double at a stroke.
With 23 of the top 25 video game producers as clients the emphasis for the company is on providing more services to each.
VMC provides on-site technical services through long standing relationships.
The hope is that Keywords will have more opportunities to cross-sell additional services to VMC’s client base, and vice versa.
The VMC deal will add an extra $57.4m of adjusted revenue plus $6.4m in earnings before interest, tax, depreciation and amortisation, on an annualised basis.
The deal is expected to complete by the end of October.
Shares discussed Keywords Studios in September.
