Keyword Studios agrees €75m credit facility as revenue rises 57%

Irish video gaming firm listed in London looks to further growth this year

Andrew Day, chief executive of Keywords Studios, which has made 30 acquisitions since 2014. Photograph: Dara Mac Dónaill

Andrew Day, chief executive of Keywords Studios, which has made 30 acquisitions since 2014. Photograph: Dara Mac Dónaill


Fast-growing Irish video gaming firm Keywords Studios has agreed a new €75million three-year revolving credit facility, as it looks to make further acquisitions.

The company, which on Monday reported a 57 per cent rise in full-year revenues, said it had an option to extend the new bank facility to €105 million and by a further two years.

The Sandyford-based group, which is listed on London’s AIM market, has a market value of more than €1 billion. It provides services to 23 of the top 25 most prominent games companies globally, including Tencent, Electronic Arts, Oculus, Supercell, Activision, Microsoft, Sega, Nintendo and Ubisoft.

Keywords said revenues rose to €151.4 million in 2017, with adjusted earnings (ebitda) up by 57 per cent to €26.3 million, and profits before tax up to €12 million. The group finished the year with €11.1million of net cash.

In less than a decade, Keywords has grown from being a small studio employing 50 people at a single site in Dublin to one that now has up to 5,000 working across 42 locations in 20 countries. It has also shifted from being a single-service business to one with lines covering integrated art production, engineering, audio services, testing, localisation and player support services across 50 languages and 14 game platforms.

The company, which made 27 acquisitions over the last three years, including 11 in 2017, announced three new deals on Monday.

It acquired Cord Worldwide and Laced Music for a total consideration of £4.5 million (€5.2 million) from the Cutting Edge Group. It also disclosed that it recently bought Maximal Studio, an audio studio in Sao Paulo in Brazil, which provides voiceover recording for the video games and learning industries, for €300,000.

Speaking to The Irish Times, Keywords chief executive Andrew Day said the new credit facility, which replaces an existing €35 million one, would ensure the company is not constrained when eying other future acquisitions. Keywords has previously said it expects to continue to to make a number of acquisitions this year as it looks to consolidate in what is a very fragmented market.

“We’re not going to slow down. I can’t promise we will have a year like the last one but I think we could do between four and 10 acquisitions in 2018,” said Mr Day. “We have a very strong pipeline of acquisitions. It is just a case of selecting the right ones and doing the due diligence on them, which can take time to process,” he added.

Keywords doesn’t give guidance on future earnings but analysts have forecast that the company will achieve revenues in or about €245 million for 2018 with a 15 per cent profit margin.

“The big picture is of a very successful company with a lot of momentum behind it in a fast-growing industry and I feel we are in a really sweet spot,” said Mr Day.