Fusion Corporate Partners

Keywords, an international technical services provider to the video games industry, is to acquire Binari Sonori S.R.L from its three founding shareholders: Fulvio Sioli, Fabio Minazzi and Andrea Ballista.

Binari Sonori is a provider of outsourced voice-over and translation services to the international video games market with operations in Milan, Italy and Los Angeles, California.  Founded in 1994, Binari Sonori focusses on high quality voice recording production (both original language and localised languages) and text translation and adaptation for leading video game publishers and developers.  Clients of Binari Sonori include Bandai Namco, Capcom, Fisher-Price, Microsoft Game Studios, Sony Computer Entertainment, Square Enix, Ubisoft and Warner Bros. Interactive Entertainment.

Keywords will pay an initial consideration of €6.0m in cash and €3.0m which will be satisfied by the issue of 1,555,650 new ordinary shares of Keywords at a price of 158.77 pence per share (being the volume weighted average price over the five business days (in both London and Milan) immediately preceding the date of this announcement).  Deferred consideration, which will not exceed a total of €4.0m, will be calculated by reference to the profit before interest and tax of Binari Sonori in the years to 31^st December 2014 and 31^st December 2015.  Deferred consideration will be satisfied by the Group as to at least 50 per cent in cash (or, at the Group’s discretion, any greater proportion in cash up to 100%) and the balance (if any) by the allotment of new ordinary shares in Keywords at the relevant volume weighted average price over the five trading days immediately prior to the relevant payment date. 

In addition to the consideration referred to above, the Selling Shareholders will receive an additional €2,622,409 at completion in respect of an agreed excess net cash position in Binari Sonori.

Completion of the Acquisition will occur upon the notarisation of a transfer deed and receipt of funds by the Selling Shareholders, both of which are expected to occur later today.  A further announcement will be made when completion has occurred.

The Selling Shareholders will be subject to a lock-in period of approximately 4 months with respect to the Consideration Shares, subject to certain exceptions, followed by an orderly market restriction for a further 12 month period.  Any shares in Keywords issued as part of the deferred consideration referred to above will be subject to an additional 12 month orderly market restriction from the date of issue.  Each of the Selling Shareholders will continue as a director of Binari Sonori.

Binari Sonori’s accounts for the 12 months to 31^st December 2013 show that it achieved revenues of €10.2m and profits before tax of €0.8m; it had net assets of €3.7m including accumulated cash balances of €3.6m.

Andrew Day, Chief Executive of Keywords Studios, commented: “The acquisition of Binari Sonori extends our geographical reach and considerably enhances our position in audio services and text localisation, particularly in the top quality end of the market for AAA games such as well-known titles including Batman: Arkham Origins, Dead Rising 3, Final Fantasy XIV Online and the Fable series.  This market has received a major boost from the recent launches of the Xbox One and PlayStation 4 which encourage larger games with even higher quality and richer content than before. We are delighted to have received strong support from new and existing institutional investors for this Placing. The two acquisitions made earlier this year have been further complemented by this acquisition of Binari Sonori, and the Placing allows Keywords to continue to be seen as an attractive acquirer of further, selective bolt-on acquisitions.”

Ireland, Dublin & Italy, Milan