In a significant development within the language services and video game industries, European private equity firm EQT is in advanced negotiations to acquire Keywords Studios for $2.79 billion (£2.2 billion). Keywords Studios, a Dublin-based company, is a leading global provider of creative and technology-enabled solutions for the video game and entertainment industries.

Keywords Studios ranks 5th in the 2024 Nimdzi 100 report with a revenue of $844.2 million. It provides services such as game development support, localization, and testing for major clients such as Activision Blizzard, Electronic Arts, and Tencent. The firm has expanded significantly since its establishment in 1998, growing through a series of strategic acquisitions.

EQT’s current cash offer of $31.98 (£25.50) per share represents a 73% premium over Keywords’ closing share price of $18.45 (£14.70) on Friday. This follows four previous unsolicited proposals from EQT, all of which were rejected by Keywords’ board. The substantial premium underscores EQT’s strong interest and the strategic value it sees in Keywords Studios.

The board of Keywords Studios has expressed a willingness to recommend the offer to shareholders, after careful evaluation with its financial advisors. This recommendation reflects confidence in both the premium offered and EQT’s support for Keywords’ growth strategy. This strategy includes building a global platform for video game and entertainment solutions through organic growth and acquisitions.

The potential acquisition is part of a broader trend of foreign takeovers of UK-listed companies, driven by relatively low valuations. This trend has seen significant activity in sectors such as retail and asset management. Keywords’ prospective acquisition by EQT further highlights this trend and underscores the increasing role of private equity in the language services industry.

EQT has until June 15 to finalize its offer, subject to due diligence and regulatory approvals. The acquisition, if completed, will mark a significant consolidation in the video game services industry, enhancing EQT’s portfolio and reinforcing Keywords Studios’ market position. This move also signals the ongoing appeal of the language services sector to private equity investors, reflecting its robust growth potential and strategic importance.

For more insights into the top players in the language services industry, the Nimdzi 100 report offers a comprehensive ranking and analysis, with Keywords Studios prominently featured among the industry’s giants.