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Keywords Studios (LSE:KWS), a global leader in creative and technology-enabled solutions for the video games and entertainment industries, has announced the acquisition of Wushu Studios Limited, a prominent game development studio based in Liverpool, United Kingdom. This strategic acquisition enhances Keywords Studios' game development capabilities and strengthens its presence in the highly competitive video game industry.
Wushu Studios: A Growing Force in Game Development
Founded in 2017, Wushu Studios initially focused on creating original IP before transitioning to a work-for-hire model. The studio provides a comprehensive range of services, including co-development, full development projects, porting, remastering, and live support services. Over the years, Wushu has collaborated with high-profile publishers and developers, contributing to the development of popular titles such as Fall Guys, State of Decay, Forza Horizon 5, and Baldur's Gate 3.
With approximately 160 employees and multiple project teams, Wushu Studios has established itself as a reliable partner in the game development industry. Despite the challenges posed by current market conditions, Wushu has demonstrated strong growth, with adjusted revenues of approximately £12.5 million and an adjusted EBITDA margin expected to align with Keywords Studios' overall performance for the year ending 31 August 2024.
Strategic Growth and Leadership Continuity
The acquisition of Wushu Studios is part of Keywords Studios' ongoing strategy to expand its service offerings and deepen its expertise in game development. Wushu's founder and majority owner, Alan McDermott, along with the existing management team, will remain with the business following the acquisition. Their continued leadership is expected to drive further growth, supported by a robust pipeline of high-quality projects.
The acquisition consideration includes both an upfront payment and an earn-out component, falling within Keywords Studios' targeted valuation range. The upfront payment was made in cash, funded through the Group's existing revolving credit facility.
