Keywords Studios to buy ‘Age of Empires’ developer for £26m

Keywords Studios has entered into a conditional agreement to snap up video game development studio Forgotten Empires for up to $32.5million (£26million).

The acquisition is part of the London-listed Irish firm’s strategy to become the ‘go to’ technical and creative services platform hub in video gaming. 

The consideration comprises $15.75million in cash upfront, $3.75million in shares to be issued one-year post-completion, and up to $13million in cash and shares based on performance.   

Bertrand Bodson, the boss of Keywords, said: ‘[Forgotten Empires] has been instrumental in helping to create, design and grow the hugely successful and expanding Age of Empires series. 

‘Forgotten Empires’ talented team brings experience and expertise particularly in real time strategy games and will be a great addition to our client offering and game development capability. 

‘Forgotten Empires’ strong track record of attracting and retaining talent globally is a testament to…the high quality of the work that the studio produces. We look forward to supporting Forgotten Empires’ continuing growth as part of the Group.’

Ryan Shepherd, studio head of Forgotten Empires, said: ‘We are delighted to join Keywords Studios, an industry leading, fast growing business with a global footprint.

‘We are really excited that they share our ambition and will provide the support to enable and underpin our continuing growth. 

‘Having worked alongside some of Keywords’ development studios we know the cultural fit will work well and we look forward to working more closely together with the wider Keywords’ group to drive the combined business forward.’

In a separate trading update today, Keywords said it had made a strong start to the year, with decent organic revenue growth in the first four months. 

In the group’s annual results published in March, Keywords said it enjoyed another year of high double-digit earnings and revenue growth.

The company said this year had also started off well, amid high demand for all its service lines.

The company’s board recommended a final dividend of 1.45p a share, which will make a total dividend for 2021 of 2.15p per share.

In the results posted in March, Keywords said it saw revenue grow 37 per cent to £433.6million over the past year, while organic revenue growth was up 19 per cent.

Adjusted profit before tax rose 56 per cent to €86million, with margins up to 16.8 per cent from 14.7 per cent. 

Keywords, which provides services to 23 of the top 25 most prominent games companies such as Activision Blizzard, has worked on recent games including Uncharted 4, Call of Duty: WWII, Mortal Combat X, Assassin’s Creed Origins, Battlefield 1, League of Legends, Fortnite, Clash Royale and Rainbow Six Siege. 

Keywords shares were up 1.1 per cent to 2,406p by Wednesday afternoon, having slipped around 4 per cent over the past year.