The acquisition of Synthesis for up to €18m is Keywords Studios’ (LON:KWS) largest to date and significantly strengthens the company’s leadership position in both localisation and audio. It also enhances earnings by an estimated 12% and 16% for FY16 and FY17 respectively. We see ample scope for continued upside as the company continues to strengthen its position in this fragmented market with earnings enhancing acquisitions.
A strong strategic fit
Keywords is acquiring Synthesis, a leading player in localisation, audio and localisation testing solutions. Synthesis is the number two player in these domains, and thus the deal strengthens Keywords’ number one position, taking market share from an estimated 10% to 15%. The business’s headquarters are in Switzerland but it has a particularly strong presence in Italy, Spain, Latin America and Asia. It also gives Keywords a presence in Germany (Hamburg) and Paris and strengthens the company’s relationship with some important developer names such as Rock Star, Take Two and Bethesda.
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