Keywords’ (LON:KWS) trading update adds further evidence to support our view that it continues to create value from its ongoing buy-and-build strategy. The most recent of its acquisitions was Volta Creation at the end of July, a deal that takes Keywords into the concept art market. Previous acquisitions are reported to be performing well, with Synthesis (its largest to date) singled out as being particularly successful. We believe that the trading update supports our existing revenue and profit forecasts. However, we have slightly upgraded our estimates to reflect the impact of the Volta acquisition, which is expected to be accretive from year one.
Extending the product offering
Keywords’ acquisition of concept art company Volta Creation is its fourth of 2016 and takes the company further upstream in the video games value chain into the distinct area of concept art production. This adds an important additional string to Keywords’ bow as it enables it to become involved in the very infancy of the video game production lifecycle, strengthening its ability to offer further services as games are developed.
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