Keywords Studios: Gobo Strengthens Engineering Operations
Edison | Aug 28, 2018 06:30AM ET
Keywords Studios' (LON:KWS) acquisition of Studio Gobo and Electric Square (NYSE:SQ) for up to £26m meaningfully strengthens the company’s engineering service line, while enhancing our FY19 earnings by 6% based on conservative assumptions. In paying a maximum of 7.6x historic EBITDA for the business, the company looks to be buying a good asset in a high value-add service line at a very reasonable multiple.
Strengthening the engineering service line
Studio Gobo and Electric Square are two Brighton, UK-based games engineering studios co-founded and led by games industry veteran, Tony Beckwith. Studio Gobo has a core strength in high-end console games development, providing full development (entire games, a new capability for Keywords) or co-development (parts of games) for a range of tier one clients including Ubisoft (For Honor), Microsoft (NASDAQ:MSFT) (Miami Street) and Disney Infinity (Marvel Super Heroes, Guardians of the Galaxy). Electric Square has core strengths in live ops development (developing new features and downloadable content to keep gamers engaged) and free-to-play and racing games. The addition of the 170 Brighton-based engineers in the combined group (Gobo) brings Keywords’ engineering team to 610 people. While the business does have some risk from Brexit and a relatively high customer concentration, the acquisition by Keywords will help mitigate these.
To read the entire report Please click on the pdf File Below:
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.