Keywords Acquires Binari Sonori

Posted: 9th May 2014 08:57

Keywords, the international technical services provider to the global video games industry, today announces that the Group has agreed to acquire the entire issued share capital of Binari Sonori S.R.L ("Binari Sonori") (the"Acquisition") from its three founding shareholders: Fulvio Sioli, Fabio Minazzi and Andrea Ballista (the "Selling Shareholders").
Binari Sonori is a leading provider of outsourced voice-over and translation services to the international video games market with operations in Milan, Italy and Los Angeles, California.  Founded in 1994, Binari Sonori focusses on high quality voice recording production (both original language and localised languages) and text translation and adaptation for leading video game publishers and developers.  Clients of Binari Sonori include Bandai Namco, Capcom, Fisher-Price, Microsoft Game Studios, Sony Computer Entertainment, Square Enix, Ubisoft and Warner Bros. Interactive Entertainment.
The Acquisition is in line with Keywords' strategy of growing both organically and by acquisition to extend the Group's client base, market penetration and service lines, where the Group can use its existing expertise, multi-service platform, scale and global reach to generate synergies.
Under the terms of the Acquisition, the Group has agreed to pay to the Selling Shareholders upon completion an initial consideration of €6.0m in cash and €3.0m which will be satisfied by the issue of 1,555,650 new ordinary shares of Keywords (the "Consideration Shares") at a price of 158.77 pence per share (being the volume weighted average price over the five business days (in both London and Milan) immediately preceding the date of this announcement).  Deferred consideration, which will not exceed a total of €4.0m, will be calculated by reference to the profit before interest and tax of Binari Sonori in the years to 31st December 2014 and 31st December 2015.  Deferred consideration will be satisfied by the Group as to at least 50 per cent in cash (or, at the Group's discretion, any greater proportion in cash up to 100%) and the balance (if any) by the allotment of new ordinary shares in Keywords at the relevant volume weighted average price over the five trading days immediately prior to the relevant payment date. 
In addition to the consideration referred to above, the Selling Shareholders will receive an additional €2,622,409 at completion in respect of an agreed excess net cash position in Binari Sonori.
Completion of the Acquisition will occur upon the notarisation of a transfer deed and receipt of funds by the Selling Shareholders, both of which are expected to occur later today.  A further announcement will be made when completion has occurred.
All shares in Keywords issued to the Selling Shareholders will be credited as fully paid and rank pari passu with the existing issued ordinary shares of Keywords when issued.  The Selling Shareholders will be subject to a lock-in period of approximately 4 months with respect to the Consideration Shares, subject to certain exceptions, followed by an orderly market restriction for a further 12 month period.  Any shares in Keywords issued as part of the deferred consideration referred to above will be subject to an additional 12 month orderly market restriction from the date of issue.  Each of the Selling Shareholders will continue as a director of Binari Sonori.
Binari Sonori's accounts for the 12 months to 31st December 2013 show that it achieved revenues of €10.2m and profits before tax of €0.8m; it had net assets of €3.7m including accumulated cash balances of €3.6m.
The Acquisition, which is not conditional on the Placing, will be funded from the Group's existing cash resources and is expected to be earnings enhancing in the current year.

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