(Bloomberg) — Keywords Studios Plc agreed to an offer from an EQT AB-led group that values the video game services company at about £2.1 billion ($2.5 billion), accepting a lower price after the video game services business was hit with delayed and canceled orders.
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Investors will get £24.50 per share in cash, the companies said in a statement on Wednesday. Keywords’ board unanimously recommended the bid, which EQT said was its final offer in the statement. EQT is leading a consortium that also includes the Canada Pension Plan Investment Board and Singapore state investment company Temasek Holdings Pte.
EQT had cut an earlier offer of £25.50 per share as the gaming industry struggled to recover from last year’s Hollywood strikes and customers pulled back on development projects. Keywords’ shares had declined more than 10% this year before the deal talks were announced in May, and the company had warned in its annual report that there was “considerable uncertainty” around the pace of recovery from the labor disputes this year.
The private equity firm said while the results of due diligence on Keywords were enough to let the deal go ahead, in the six months after it closes, the bidders will “undertake an in-depth review of the business and operations.”
Keywords said last month that it expects growth to pick up in the second half of the year. The company was established in 1998 and listed on the London Stock Exchange’s AIM market in 2013, provides game development, audio and art services to clients such as Epic Games Inc. and Activision Blizzard Inc.
Keywords has expanded rapidly since going public by acquiring numerous support studios and has said it’s in talks for deals currently. Titles it has worked on include Fortnite, Call of Duty and Baldur’s Gate 3. The company operates across 26 countries.
Shares of Keywords rose 2.8% to £23.82 at 9:45 a.m. in London.
(Updates with additional details throughout)
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