Keywords Studios Acquisition: Key Details, Impact, and What Comes Next

EQT, in collaboration with CPP Investments and Temasek, has successfully acquired Keywords Studios, a prominent international video games service provider. This acquisition, valued at $2.8 billion, marks a significant shift in the industry, positioning Keywords Studios for accelerated growth and expanded market reach under new ownership.

What Is Keywords Studios?

Founded in 1998, Keywords Studios is a leading provider of technical and creative solutions to the global video games industry. The company offers a comprehensive range of services, including game development, art creation, audio development, QA testing, localization, and player engagement. Keywords Studios differentiates itself with its end-to-end platform, cutting-edge technology and AI solutions, and deep industry insights, providing unparalleled experiences and global reach for its clients.

Who Acquired Keywords Studios?

EQT Group is a global investment organization known for its strategic investments in high-quality companies across various sectors, including private capital, real assets, and private wealth. The company offers services such as early-stage ventures, large-cap buyouts, and sustainable infrastructure investments. With over 300 portfolio companies worldwide, EQT is recognized for its thematic investment approach and active ownership model, establishing itself as a leader in responsible investment practices and long-term value creation.

When Was Keywords Studios Acquired?

EQT, along with CPP Investments and Temasek, completed the acquisition of Keywords Studios on October 24, 2024. This acquisition aligns with the broader industry trend of private equity firms investing heavily in high-growth sectors like video gaming. The timing is significant as it coincides with a surge in global buyout activity and a shift towards technology innovation and international expansion within the gaming industry. This strategic move positions Keywords Studios for accelerated growth and market expansion.

Why Was Keywords Studios Acquired?

• Market Expansion: The acquisition will enable Keywords Studios to expand into new and adjacent markets. This strategic move is aimed at broadening Keywords Studios' reach into adjacent media and entertainment markets, as well as fast-growing technologies. By leveraging EQT's global network and resources, Keywords Studios can accelerate its market presence beyond its current scope.
• Technology Integration: EQT plans to leverage its experience in technology investments to accelerate Keywords Studios' growth. This includes making long-term investments necessary for transitioning to next-gen video gaming and global expansion. The focus on innovative technologies and services will help Keywords Studios continue to meet changing customer needs and maintain its status as a global leader in gaming services.
• Competitive Advantage: Keywords Studios' competitive advantage is underscored by its strong talent base, deep industry relationships, and focus on technology innovation and higher value-added services. The acquisition by EQT, a firm with a history of investing in technology, is expected to enhance Keywords Studios' growth and innovation, providing a competitive edge in the market. This strategic partnership positions Keywords Studios to unlock substantial long-term value and drive future growth.

Acquisition Terms

• Acquisition Price: $2.8 billion (2.2 billion pounds)
• Payment Method: Cash bid at 2,450 pence per share
• Key Conditions or Agreements:
  • Keywords Studios’ ordinary shares have ceased trading on the AIM market and the company has been delisted from the London Stock Exchange.
  • The offer must be approved by shareholders representing at least 75% of the votes cast at a forthcoming general meeting.
  • Major shareholders Franklin Templeton and Pictet have indicated they will vote in favor of the deal.
  • The transaction is subject to customary regulatory approvals.
  • Keywords Studios was advised on the offer by Deutsche Numis and Robey Warshaw.

Impact on Keywords Studios

The acquisition of Keywords Studios by EQT, CPP Investments, and Temasek has led to significant operational changes. Keywords Studios has been delisted from the AIM market of the London Stock Exchange, marking a new chapter under private ownership. The management team will continue to lead the company, supported by the new investors. This transition is expected to bring substantial investments aimed at accelerating growth and expanding into new markets. The focus will be on leveraging innovative technologies and services to maintain Keywords Studios' leadership in the global gaming services market.

In terms of product offerings, the acquisition is set to enhance Keywords Studios' capabilities and service portfolio. The additional capital will support the company's value accretive acquisition strategy, enabling it to invest in next-gen video gaming technologies and international expansion. Employee reactions have been positive, with CEO Bertrand Bodson acknowledging their hard work and dedication. While specific customer reactions were not detailed, the strategic move is anticipated to strengthen Keywords Studios' ability to serve its clients, including major players like Activision Blizzard and Microsoft. For founders considering business transitions, tools like Sunset can assist in managing such processes compliantly.