Monday 23 September 2019

Keywords Studios buys Canadian firm as it extends acquisition spree

Expansion: Keywords Studios CEO Andrew Day said it hoped to grow its presence in Vancouver
Expansion: Keywords Studios CEO Andrew Day said it hoped to grow its presence in Vancouver
Ellie Donnelly

Ellie Donnelly

Irish video game company Keywords Studios has acquired Descriptive Video Works for CAD$3.2m (€2.1m).

Founded in 2003 and based in Vancouver, Canada, Descriptive Video Works provides audio description services.

The company works primarily with broadcasters and streaming media providers in Canada and the United States such as NBC Universal, CBS, and CBC.

It is also an approved Netflix Post-Production Partner (NP3) for English audio description services.

Keywords Studios CEO Andrew Day said: "We are looking forward to supporting the accessibility needs of the film, TV and video-games industry as these markets continue to develop.

"The acquisition also provides Keywords with its first studio in Vancouver, a city with very active involvement in film, television and video games and we hope to grow our presence there accordingly."

In the year to 30 November 2018, Descriptive Video Works generated adjusted profit before tax of CAD 660,000 (€439,000) from revenues of CAD2.2m (€1.5m).

Keywords is paying cash of CAD$2.24m for the group, while the rest of the purchase will be funded through the issue of 35,560 new ordinary shares in Keywords.

The shares will be issued to Diane Johnson, founder of Descriptive Video Works, on the first anniversary of the deal.

This is the third acquisition by Keywords this year.

In April, the Dublin-headquartered group acquired Japanese group Wizcorp for JPY120m.

Meanwhile in February it bought GetSocial, a cloud-based software platform.

Financial details of the GetSocial acquisition were not disclosed. However, it is believed the Hague-based entity is loss-making as it is in a development phase, with an expectation of it breaking even some time next year.

Joe Quinn, analyst with Davy Stockbrokers, said the latest acquisition was a "highly complementary deal" for Keywords, as "it broadens its offering to clients via a new audio service".

"We reiterate our 'outperform' rating," Mr Quinn added.

Last year Keywords acquired eight companies, investing €33.1m in cash (gross) and €27.3m in deferred cash and in shares.

The company has plans to buy a similar number this year, with a focus on marketing, engineering and audio companies.

Keywords has up a revolving credit facility of up to €105m over a three year period to spend on purchasing other companies.

In 2018 the group saw its revenue jump 66pc to €250.8m.

On a like-for-like basis revenue increased 10pc last year.

Established in 1998, Keywords has over 50 facilities in 21 countries.

It has around 850 "blue-chip" clients around the world.

Shares in the company were trading up 2.8pc in London yesterday.

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