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Multi-bagger in the Making
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tedlim
Veteran |
29-May-2024 11:47
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UK gaming industry: winning friends https://www.ft.com/content/3bae6c74-dee6-4cc5-9b8b-fcd22d7b8382 Developers shore up their balance sheets after a difficult few years Pass the controller. London-listed video game services company Keywords Studios is weighing a £ 2.2bn offer that more than doubles its undisturbed share price. On Scotland&rsquo s east coast, Dundee, once famed for its production of jute, is styling itself as the gaming capital of Europe, replete with cluster effect and specialised university courses. Shares in Cambridge-based Frontier Developments, home of big budget games, such as Rollercoaster Tycoon, have more than doubled in the past two months. Britain&rsquo s $5.5bn gaming industry, which took off after the introduction of tax breaks in 2014, could use a change in fortunes. The boom sparked by Covid-19, which saw more players spend more time gaming and prompted a record re-rating in valuations, unwound sharply last year. Companies were left with bloated cost bases, designed to keep abreast of the 10-20 per cent annual growth rates of 2020 and 2021. They had other battles on their hands. Big shot titles, such as Gran Turismo 7, postponed by Covid, entered the market, pulling eyeballs away from less glitzy indie games. Microsoft and Sony cut contributions to developers from subscription deals. Result: investors took a bath as the flurry of turn-of-the-decade listings, and concomitant lofty growth expectations, started to look as fantasy-like as some of the games. Cash ran dry &mdash witness tinyBuild&rsquo s $12.3m fund raising in January &mdash and rich multiples shrank faster than Super Mario encountering an enemy. Hence, while that offer for Keywords looks rich at a prospective price/earnings ratio of 24 times, it basically unwinds the losses of the past 13 months or so. Still, as putative buyer EQT&rsquo s interest suggests, the plot lines are changing. First up, swingeing cost cuts. MIcrosoft&rsquo s gaming division is cutting 1,900 of its 22,000 staff Riot Games and Twitch arswingeing cost cuts. MIcrosoft&rsquo sywide, maybe a tenth of workers will be shed this year. Other steps are under way to shore up balance sheets. Frontier Developments this year sold the rights to hit game Roller Coaster Tycoon 3 to Atari for $7mn, lifting its cash position to £ 23.4mn at the end of March. Next, companies are reining in their ambitions and shrinking games pipelines. This is not as detrimental to earnings as it sounds: as in the music industry, back catalogues have a long shelf life. Patrick O&rsquo Donnell, analyst at Goodbody, reckons some 60 per cent of player engagement is in titles more than six years old. Besides, it still leaves ample footprints. Indie developer Team17, for example, bought Ireland-based StoryToys in 2021, bringing in the pre-schooler market. Others have diversified into educational games and simulated experiences, like train driving. Keywords itself occupies a more peripheral space it provides services to gaming companies, making it a useful proxy for the sector. Investors, fearing AI would eat its lunch, have been selling down the stock. That looks overdone, at least in the short term. The group&rsquo s long acquisition streak &mdash more than 65 since floating in 2013 of which 22 were bought for a total &euro 572m since the beginning of 2020 &mdash means it has legions of engineers and facilities in 26 countries. That leaves it ready to take on the work that pruned-down studios will now be more minded to outsource, such as translation, quality control and ensuring seamless play when users switch to a different device. Clearly, private equity sees value. EQT&rsquo s bid for Keywords is its fifth. Just a few months earlier Europe&rsquo s CVC Capital bought UK video games maker Jagex, home of the long-running RuneScape franchise, for about £ 910mn in a private equity flip. Game on. |
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Joelton
Supreme |
28-May-2024 10:56
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Quick snapshot of SGX-listed gaming services company, Winking Studios:
- One of world' s largest award-winning game art outsourcing studios and an established game development company: www.winkingworks.com
- More than 25 years of experience with over 700 employees including 600 designers and artists
- Serving a global base of prominent customers (21 of the 25 top gaming companies) with blue-chip customers, such as Tencent, Netease, SONY, among others
- Consistent record of profitability with good gross margins and net margins
- Proactive M& A activities since Nov 2023 IPO
- Strong global market prospects with gaming being an essential part of lifestyle and the advancements in mobile technology continue to encourage the industry' s robust growth
- Majority owned by Acer Gaming Inc., a subsidiary of Acer Incorporated
Winking Studios also recently announced two key initiatives:
- fund raising of S$27 million to accelerate their M& A roadmap
- dual-listing plans on AIM to unlock more value and business opportunities
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Alignment
Master |
27-May-2024 23:25
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Saying Winking Studios and Keywords are peers is a bit of a stretch. Like the optimism though! | ||||
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For_The_Next_Leg
Veteran |
27-May-2024 22:19
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This seems to be the latest project the company is working on - with Riot Games!!
https://x.com/WinkingStudios/status/1770812610914717979
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Joelton
Supreme |
27-May-2024 10:25
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Winking Studio&rsquo s peer, AIM-listed Keywords Studios &mdash a gaming outsourcing company dreamt up in Ireland hitting the big leagues
London-listed Irish services company, which was dreamt up by two Italian immigrants in Dublin, hits the big league with a blockbuster takeover approach.
The business was founded in 1998 to help business software developers translate their products for release in other countries. In the early 2000s, it shifted focus towards games, and has since ridden the huge expansion in the size of the global industry, which far exceeds other entertainment sectors such as Hollywood or the music industry.
When Keywords Studios went public on London&rsquo s junior Aim market in July 2013, the company was valued at just shy of £ 50 million.
The tiddler stock had a strong debut, raising £ 28 million in its initial public offering, with Andrew Day, then chief executive, hailing the participation of blue chip institutional investors as a validation of the company&rsquo s growth story.
Yet even Day might have found it hard to imagine where Keywords would be 11 years later.
The company&rsquo s pitch to investors back in 2013 was that it would play a leading role in the consolidation of a highly fragmented games services industry by acquiring complementary businesses. It has grown to become one of the biggest businesses on the junior market by providing services to the developers of some of the world&rsquo s biggest games, including Fortnite, Clash of Clans, League of Legends and Assassin&rsquo s Creed.
After acquiring more than 60 companies over a decade and achieving a 6 per cent market share, Keywords has recently said it would be willing to accept a £ 2bn buyout offer, in the latest foreign takeover of a London-listed business.
SGX-listed Winking Studio, backed by ACER, has recently announced plans for a dual listing at AIM market of the London Stock Exchange. Since its IPO in November 2023, the Winking Studio has announced 2 acquisitions, which is in line with the Group&rsquo s business strategy to pursue acquisitions to boost sales, capabilities and market presence globally.
In line with its strategic focus on geographic diversification and expanding revenue streams, Winking Studio achieved significant performance recovery in 2023, fuelled by securing new contracts and expanding its client base in the United States and South Korea, both with existing and new clients. Notably, the United States contributed 16.8% of total revenue in FY2023, a marked increase from 9.7% in FY2022.
Winking Studio wrapped up FY2023in a strong financial position with cash and cash equivalents of US$16.4 million as at 31 December 2023, up from US$6.1 million as at 31 December 2022, and zero borrowings.
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WBdisciple
Master |
27-May-2024 10:07
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10 years from £ 50m mkt cap to £ 2.2billion
Winking Studio&rsquo s peer, AIM-listed Keywords Studios &mdash a gaming outsourcing company dreamt up in Ireland hitting the big leagues London-listed Irish services company, which was dreamt up by two Italian immigrants in Dublin, hits the big league with a blockbuster takeover approach.
The business was founded in 1998 to help business software developers translate their products for release in other countries. In the early 2000s, it shifted focus towards games, and has since ridden the huge expansion in the size of the global industry, which far exceeds other entertainment sectors such as Hollywood or the music industry.
When Keywords Studios went public on London&rsquo s junior Aim market in July 2013, the company was valued at just shy of £ 50 million.
The tiddler stock had a strong debut, raising £ 28 million in its initial public offering, with Andrew Day, then chief executive, hailing the participation of blue chip institutional investors as a validation of the company&rsquo s growth story.
Yet even Day might have found it hard to imagine where Keywords would be 11 years later.
The company&rsquo s pitch to investors back in 2013 was that it would play a leading role in the consolidation of a highly fragmented games services industry by acquiring complementary businesses. It has grown to become one of the biggest businesses on the junior market by providing services to the developers of some of the world&rsquo s biggest games, including Fortnite, Clash of Clans, League of Legends and Assassin&rsquo s Creed.
After acquiring more than 60 companies over a decade and achieving a 6 per cent market share, Keywords has recently said it would be willing to accept a £ 2bn buyout offer, in the latest foreign takeover of a London-listed business.
SGX-listed Winking Studio, backed by ACER, has recently announced plans for a dual listing at AIM market of the London Stock Exchange. Since its IPO in November 2023, the Winking Studio has announced 2 acquisitions, which is in line with the Group&rsquo s business strategy to pursue acquisitions to boost sales, capabilities and market presence globally.
In line with its strategic focus on geographic diversification and expanding revenue streams, Winking Studio achieved significant performance recovery in 2023, fuelled by securing new contracts and expanding its client base in the United States and South Korea, both with existing and new clients. Notably, the United States contributed 16.8% of total revenue in FY2023, a marked increase from 9.7% in FY2022.
Winking Studio wrapped up FY2023in a strong financial position with cash and cash equivalents of US$16.4 million as at 31 December 2023, up from US$6.1 million as at 31 December 2022, and zero borrowings.
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For_The_Next_Leg
Veteran |
22-May-2024 16:19
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Recently there is a peer of WKS - Keyword Studios - that was acquired for 2bn pounds. The interesting point wasn' t the offer price. The interesting point was that premium that was given to Keyword Studios. As per Google, the 1 month gain in share price was almost 100% and its still below 2bn pound valuation.
This meant that this industry on a whole is being undervalued. There must be something that the market is overlooking. Once again, do note that AI is net positive for this industry. Finally, the PE even post acquisition was almost 105x (pre acquisition probably 50x).
WKS PE is about 25x now. Imagine if the company continues to build on and make more revenue and more net income, I believe the potential is huge in the long run.
https://www.investingnote.com/posts/2779532 |
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Joelton
Supreme |
21-May-2024 10:20
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Winking Studios Peer: AIM-listed Keywords Studios says it will accept £ 2bn offer
Video game services company backs EQT private equity bid in latest foreign move on UK-listed firm
The video game services company Keywords Studios has said it would be willing to accept a £ 2bn buyout offer, in the latest foreign takeover of a London-listed business.
Shares in the Dublin-headquartered Keywords jumped 62% on Monday morning after it said it would be minded to recommend an offer from the Swedish private equity investor EQT Group.
The company is listed on the London Stock Exchange&rsquo s Alternative Investment Market (Aim). It has grown to become one of the biggest businesses on the junior market by providing services to the developers of some of the world&rsquo s biggest games, including Fortnite, Clash of Clans, League of Legends and Assassin&rsquo s Creed.
A takeover would add to the growing list of companies leaving the London Stock Exchange, amid concerns in the City of London over whether UK companies are undervalued. The retailer Hotel Chocolat and the asset manager Gresham House are two of the most recent Aim-listed companies that have been bought out.
EQT has offered £ 25.50 a share for Keywords, 70% above its closing price of £ 14.70 on Friday, although well below its peak during the pandemic tech bubble of more than £ 33. Shares were trading at £ 23.78 after rising on Monday.
The offer, if confirmed, would value Keywords at more than £ 2bn. EQT has until 15 June to make a firm offer or walk away.
Keywords revealed that there had been a protracted courtship, with four unsolicited offers rejected. The company said the latest offer was &ldquo a significant increase from the initial proposal&rdquo , although it did not say what the first offer was.
The business was founded in 1998 to help business software developers translate their products for release in other countries. In the early 2000s, it shifted focus towards games, and has since ridden the huge expansion in the size of the global industry, which far exceeds other entertainment sectors such as Hollywood or the music industry. It listed its shares in 2014.
Keywords said it was &ldquo confident in the company&rsquo s growth strategy of building the only truly global platform providing solutions to the video games and entertainment industries, both organically and through acquisitions, and EQT is supportive of this strategy&rdquo .
Katie Cousins, an analyst at Shore Capital Markets, an investment bank, said Keywords&rsquo s share price had dropped as tech valuations &ldquo normalised&rdquo from the excesses of the pandemic era, and as investors fretted about the possibility of artificial intelligence threats to its business model.
However, she added that the company has a &ldquo leading status&rdquo in its field, with big-name clients and services that should benefit as the industry grows.
Those services include producing games in whole or in part for other developers, producing voice and sound effects for games, translating games into different languages, and porting games between different platforms such as Microsoft&rsquo s Xbox and Sony&rsquo s PlayStation.
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WBdisciple
Master |
21-May-2024 09:17
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Winking Studios Peer - AIM-listed Keywords Studios says it will accept £ 2bn offer
Video game services company backs EQT private equity bid in latest foreign move on UK-listed firm
The video game services company Keywords Studios has said it would be willing to accept a £ 2bn buyout offer, in the latest foreign takeover of a London-listed business.
Shares in the Dublin-headquartered Keywords jumped 62% on Monday morning after it said it would be minded to recommend an offer from the Swedish private equity investor EQT Group.
The company is listed on the London Stock Exchange&rsquo s Alternative Investment Market (Aim). It has grown to become one of the biggest businesses on the junior market by providing services to the developers of some of the world&rsquo s biggest games, including Fortnite, Clash of Clans, League of Legends and Assassin&rsquo s Creed.
A takeover would add to the growing list of companies leaving the London Stock Exchange, amid concerns in the City of London over whether UK companies are undervalued. The retailer Hotel Chocolat and the asset manager Gresham House are two of the most recent Aim-listed companies that have been bought out.
EQT has offered £ 25.50 a share for Keywords, 70% above its closing price of £ 14.70 on Friday, although well below its peak during the pandemic tech bubble of more than £ 33. Shares were trading at £ 23.78 after rising on Monday.
The offer, if confirmed, would value Keywords at more than £ 2bn. EQT has until 15 June to make a firm offer or walk away.
Keywords revealed that there had been a protracted courtship, with four unsolicited offers rejected. The company said the latest offer was &ldquo a significant increase from the initial proposal&rdquo , although it did not say what the first offer was.
The business was founded in 1998 to help business software developers translate their products for release in other countries. In the early 2000s, it shifted focus towards games, and has since ridden the huge expansion in the size of the global industry, which far exceeds other entertainment sectors such as Hollywood or the music industry. It listed its shares in 2014.
Keywords said it was &ldquo confident in the company&rsquo s growth strategy of building the only truly global platform providing solutions to the video games and entertainment industries, both organically and through acquisitions, and EQT is supportive of this strategy&rdquo .
Katie Cousins, an analyst at Shore Capital Markets, an investment bank, said Keywords&rsquo s share price had dropped as tech valuations &ldquo normalised&rdquo from the excesses of the pandemic era, and as investors fretted about the possibility of artificial intelligence threats to its business model.
However, she added that the company has a &ldquo leading status&rdquo in its field, with big-name clients and services that should benefit as the industry grows.
Those services include producing games in whole or in part for other developers, producing voice and sound effects for games, translating games into different languages, and porting games between different platforms such as Microsoft&rsquo s Xbox and Sony&rsquo s PlayStation.
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Joelton
Supreme |
20-May-2024 14:58
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SGX-listed Winking Studio (market cap of S$70 million) peer, Keywords Studios, in advanced discussion for S$3.8 billion takeover by EQT
EUROPEAN private equity group EQT is in advanced discussions to buy Dublin-based video game services company Keywords Studios for £ 2.2 billion (S$3.8 billion), the companies said in a statement.
EQT is negotiating over a possible cash offer of £ 25.50 per share of London-listed Keywords, the statement said. This offer represents a premium of about 73 per cent over Keywords&rsquo closing share price of £ 14.70 on Friday.
EQT had previously made four unsolicited proposals for Keywords, all of which were rejected by the company&rsquo s board, the statement said. The current offer represents a significant increase from the initial proposal, it added.
After careful evaluation with its financial advisers, the Keywords board concluded that it &ldquo would be minded to recommend&rdquo the proposal to the company&rsquo s shareholders, the statement said.
Under Britain&rsquo s takeover rules, EQT has until Jun 15 to either make a firm offer or walk away.
Established in 1998, Keywords Studios is a global provider of creative and technology-enabled solutions to the video games and entertainment industries and now has over 70 facilities in 26 countries.
Winking Studios (market cap of S$70 million and backed by ACER) has recently announced plans to pursue a dual listing in AIM of the London Stock Exchange.
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For_The_Next_Leg
Veteran |
20-May-2024 08:54
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Remember AI is a tool to increase efficiency.
https://www.tubinvesting.com/2024/05/introducing-winking-studios-navigating.html
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MrBear12
Supreme |
20-May-2024 08:42
Yells: "A bear will always be a bear" |
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KGI Securities Initiates Winking Studios with OUTPERFORM, Target price:S$0.47 - the MOST BULLISH | ||||
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WBdisciple
Master |
20-May-2024 08:39
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KGI report is a good read on Winking Studios...all the best to those vested
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WBdisciple
Master |
20-May-2024 08:37
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Stock market feed not cheap...but Winking Studios is a good company (helmed by a passionate and experienced CEO) that potentially can become another Keywords Studios. | ||||
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MrBear12
Supreme |
20-May-2024 08:05
Yells: "A bear will always be a bear" |
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Exciting that CEO is a gaming enthusiast. He can design for us a stock market game that simulates the stock exchanges in the world with real time data for us to play. It' ll teach our descendants the art of the game in the stock market.
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WBdisciple
Master |
20-May-2024 08:01
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No lah...pure coincidence...I attended Winking Studios presentation before and i rem Winking' s CEO, Johnny, talking about Keywords Studios and how he aim to use their same playbook to expand via M& As and become the emerging market leader. Johnny is a gamer as well, knows his business in and out and passionate about this industry hence they are on my radar screen.
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MrBear12
Supreme |
20-May-2024 07:47
Yells: "A bear will always be a bear" |
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Hey guys, You like gaming? I loved it as an adult. How about you? If you are a gamer like me, Check this out! 5 Things To Know About Winking Studios (SGX: WKS), The Company That Provided Artwork For Games Like Assassin&rsquo s Creed, Genshin Impact, And FIFA Online 4 (dollarsandsense.sg)
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tedlim
Veteran |
20-May-2024 07:21
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Hey WB, you heard of Keywords Studios acquisition hence you have been sharing Winking Studios? heehee...EQT is a big PE and reputable fund and their interest in such gaming outsourcing companies is positive, and i think only Keywords and WInking Studios are the larger ones listed. | ||||
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WBdisciple
Master |
20-May-2024 06:56
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Positive news for SGX-listed Winking Studio (market cap of S$70 million). Their peer, AIM-listed Keywords Studios, is in advanced discussion for S$3.8 billion takeover by EQT: https://www.businesstimes.com.sg/companies-markets/eqt-talks-buy-game-services-company-keywords-studios-ps2-2b-billion Don' t forget, Winking Studios, has announced plans for dual-listing at AIM about 3 weeks back: https://investor.winkingworks.com/news.html/id/2490263 |
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WBdisciple
Master |
17-May-2024 10:35
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- KGI Securities Initiates Winking Studios with OUTPERFORM, Target price:S$0.47 https://www.kgieworld.sg/research/company-initiation-winking-studios-limited/ - UOB Kay Hian Initiates coverage on Winking Studios with BUY, Target price:S$0.35 https://www.businesstimes.com.sg/companies-markets/brokers-take-uobkh-initiates-coverage-winking-studios-buy |
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