Irish video game firm Keywords Studios buys German dubbing company as first-half profits soar
Irish video games company Keywords Studios has bought a German audio dubbing company for €3.7m in cash and shares and reported strong growth in its first-half revenue and profits.
Its acquisition of Berlin-based TV+Synchron (TVS) - which has been dubbing films, video and video games for 25 years and includes HBO, Amazon, Cartoon Network and Warner Bros among its clients - will more than double Keywords’ existing ability to localise games and other content for the German gaming market.
The deal, which is expected to close by October 1, involves €2.8m in cash on completion and €0.9m through the issue of new ordinary shares in Keywords to existing TVS shareholders 12 months later.
"This acquisition is an important milestone in the development of our audio services in Europe,” said Keywords chief operating officer Giacomo Duranti.
“Germany is one of the two largest markets for voice-over and dubbing in Europe, together with France, where Keywords already has an unparalleled offering. The integration of TVS into the group will create a market-leading provider of services for German localised video games.”
Keywords said revenue rose by 39.3pc to €153.2m in the first six months of 2019, while adjusted profit before tax - reflecting changes in its accounting rules since 2018 - rose by 14.3pc to €18.4m.
Like-for-like revenue, which factors out the impact of four acquisitions over the past year, rose by 17.3pc to €146.4m.
The company offered a buoyant outlook, noting that many of its clients - which include 23 of the world’s top 25 video game makers – increasingly were relying on outsourced talent.
Keywords said it already was investing in 1,400 new work stations in its global studio network, with plans to expand staff by around 25pc at studios in Montreal, Katowice, Poland; Manila, Brighton, England; Mexico City, Tokyo, New Delhi and Sao Paolo, Brazil.
“Trading in the second half has started well, with continued strong performances from our Game Development, Functional Testing and Art Creation service lines in particular,” said chief executive Andrew Day.
“Overall, this leaves us well placed to deliver revenues for the full year at the upper end of current market expectations with our profit expectations broadly unchanged.”
Mr Day said Keywords would “grow our relationships with the major games companies through increased capacity, new services and dedicated outsourced services and increase margins to normal group levels as we benefit from these investments during 2020.
"Our acquisition pipeline is very healthy and we are actively reviewing a number of attractive acquisition opportunities that would add critical mass, capacity, and extend our service offering or geographical penetration,” he added.
Among the recent video game releases supported by Keywords are ‘Fortnite’, ‘Uncharted 4: A Thief's End’, ‘Call of Duty: WWII’, ‘Mortal Combat X’, ‘Assassin's Creed Origins’, ‘Battlefield 1’, ‘League of Legends’, ‘Clash Royale’ and ‘Rainbow Six Siege’.
Keywords, founded in 1998 and based in Leopardstown, has more than 50 facilities in 21 countries. It provides art creation, software engineering, testing, localisation, audio and customer care services in more than 50 languages for 950 clients using 16 games platforms worldwide.
Keywords Studios is listed on the AIM index in London.