HomeBussinessEQT’s €2.3bn offer for Dublin-based Keywords Studios could see more bidders emerge

EQT’s €2.3bn offer for Dublin-based Keywords Studios could see more bidders emerge


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Studio founded in 1998 has worked on some of the industry’s best-selling video games

But the indicative £25.50 a share offer – a 70pc premium to its closing price last Friday – could be just the starting gun in a race to buy the business.

Goodbody Stockbrokers reckons that other private equity interest in the company will emerge, citing KKR as among those that could be potentially interested.

Last year, Keywords’ revenue rose 13pc to €780m, with organic revenue climbing 6pc. It posted an adjusted operating profit of €122m, and reported operating profit of €47m.

The adjusted figure was 6pc higher than in 2022.

The group has undertaken dozens of acquisitions over the past decade and now has 13,000 employees.

Keywords Studios, whose chief executive is Bertrand Bodson, counts 24 of the top 25 games developers among its customers.

It has worked on titles such as ‘Starfield’, a space game developed by Bethesda Game Studios and Eidos’ PC version of ‘Guardians of the Galaxy’ as well as ‘League of Legends’ and ‘Fortnite’.

Keywords was founded in 1998 by Giorgio Guastalla and his wife Teresa Luppino. Mr Guastalla had previously worked at Microsoft’s Dublin office. He stepped down as a non-executive director of Keywords in 2022.

The biggest shareholders in the London-listed company are institutions. Data from Bloomberg shows that the single largest shareholder is Capital Group, with a 7.8pc stake.

Liontrust Asset Management owns 5.7pc and Octopus Investments has just under 5pc. There is at least 34 institutions with holdings, some as small as 0.7pc.

Keywords confirmed the possible offer from EQT at the weekend.

“The possible offer follows four previous unsolicited proposals from EQT in recent months, which the board rejected, and represents a significant increase from the initial proposal,” it noted.

“The board remains confident in the company’s growth strategy of building the only truly global platform providing solutions to the video games and entertainment industries, both organically and through acquisitions, and EQT is supportive of this strategy.”

The company added that the offer made by EQT is at a level that the board “would be minded to recommend” to shareholders if a firm offer is made.

Under takeover rules, EQT has until June 15 to make a formal offer.

“We think it is possible to see other private equity competition rather than competition from industry players due to Keyword Studios’ market leadership position,” said Patrick O’Donnell of Goodbody Stockbrokers.

“We think the overall consolidation story, the cash-generative nature of the Keywords Studios business and the overall total addressable market growth opportunity are interesting to many large private equity funds,” he added.

“Therefore, we think there could be additional private equity competition for Keywords and the likes of KKR cannot be ruled out.”

Mr O’Donnell pointed out that China’s Tencent – a global mobile video game giant – was the last firm to acquire a company similar to Keywords, when it acquired Sumo Group in 2021.

However, he said he does not expect Tencent to enter the fray to buy ­Keywords.

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