Keywords Studios plc Acquires Sperasoft

Posted: 13th December 2017 08:41

Keywords Studios, the international technical services provider to the global video games industry, today announces that it has acquired Sperasoft Inc and Sperasoft Studio LLC (together, "Sperasoft"), for a total consideration of $27 million from the founders Igor Efremov, Alexei Kudriashov and Mark Rizzo (the "Sellers").

Headquartered in Santa Clara, California, Sperasoft provides game development, art creation and software engineering services to video game developers and publishers around the world from its production studios in St Petersburg and Volgograd, Russia and Krakow, Poland. 

Founded in 2004, Sperasoft employs 400 software engineers and artists. The company offers a full range of services for initial game development as well as developing games in live operations.  Specifically, these services include:

  • Full game development and co-development in which Sperasoft will develop the game or an area of the game on behalf of the game company, including creating the art assets for the game.
  • Live operations in which Sperasoft develops new features and downloadable content packages to ensure the games they support continue to keep players excited and engaged.
  • Server side infrastructure development and network operations support in helping build and maintain massive online platforms to support multiplayer online games.
  • Porting and remastering services in which Sperasoft will adapt a game to run on a different platform or upgrade a game for an older generation platform to a run on current generation devices including the remastering of the art and animation.

Over the years, Sperasoft has delivered consistent high quality work for its clients including Electronic Arts, Ubisoft, Warner Bros and Riot Games. For instance, the company is proud of the recent work of its St Petersburg studio, which worked alongside five of Ubisoft's internal studios to develop Assassin's Creed: Origins, which launched to critical acclaim on 27th October 2017.

The acquisition of Sperasoft is in line with Keywords Studios' strategy to grow organically and by acquisition as it selectively consolidates the highly fragmented market for video game services.  Sperasoft adds considerable expertise and scale to Keywords new and growing Engineering Services business and adds additional scale to the Art creation business.  In joining the Group, Sperasoft also provides Keywords with production centres and supporting management in Russia and Poland which are important locations for video game services talent across all of Keywords service lines.

Igor, Alexei, Mark and the rest of the Sperasoft team will remain with the business and assist the wider group with its growth plans in Engineering Services and in developing the wider business within Eastern Europe.  

Sperasoft has grown steadily over the years increasing revenues from $10.4m in 2015 to $16m in 2016. It is anticipated to grow to approximately $20m for the year ending 31 December 2017. The underlying adjusted EBITDA for 2017 is expected to be approximately $2m.

Under the terms of the acquisition, which is expected to be earnings enhancing in the first year, Keywords is paying a total consideration of $27m. This is being satisfied by $22m in cash, $1.0m of which is deferred until the first anniversary of the acquisition, funded from the Group's existing resources. The remainder is being satisfied by the issue of 260,049 new ordinary shares in Keywords, which will be issued to the Sellers on the first anniversary of the acquisition and will then be subject to orderly market provisions for a further 12 months.

Andrew Day, Chief Executive Officer of Keywords Studios, commented:

"The acquisition of Sperasoft provides us with an entry point into co-development, positioning us as a strategic partner to games developers at the early stages of the games development lifecycle. As games are becoming bigger and are higher definition, game developers are increasingly relying upon co-development arrangements with companies like Sperasoft to provide them with broader capability to develop both initial games and additional content and features post launch.

"Sperasoft adds considerably to our engineering services division which we intend to continue to build organically and through acquisition, as well as significantly enlarging our range of services and geographic footprint.

"We are delighted to welcome Sperasoft to the Keywords family and we look forward to working closely with their highly talented team to build upon their strong industry reputation and relationships with some of the world's leading games developers and publishers."

Igor Efremov, Chief Executive Officer of Sperasoft, commented:

"We are delighted to be joining Keywords Studios in a union that we believe will enable Sperasoft to grow and expand our offering to our existing partners as part of a larger group. We look forward to working with other members of the Group as we are confident that our vision and commitment to providing the very best support to the video games industry is very much aligned."

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