Keywords' 2018 acquisition activity was worth $68.1m

Keywords' 2018 acquisition activity was worth $68.1m

Keywords acquired eight companies in deals worth $68.1m (€60.4m) in the 2018 calendar year.

That's according to the services and software giants' financial report for 2018, which reveals that it paid out $37.3m (€33.1m) gross in cash for these deals, with a further $30.8m (€27.3m) being tied up in shares and deferred cash.

During an investor Q&A after the financial presentation, CEO Andrew Day (pictured) was asked whether he'd want to make another acquisition the size of VMC. Keywords acquired the localisation QA specialist in October 2017 for $66.4m, which - given that this is one purchase that is just below the total amount of financial outlay for the eight 2018 acquisitions - is an indication of how big this purchase was.

Day said that he'd love to buy a company that big again, but said that he wasn't sure if there were many companies of that scale around.

"Yes, [the VMC acquisition] has been very successful," he said.

"Of course, I'd love to have seen less revenue attrition than we saw, but in terms of our ability to get our hands around a business of some scale and integrate that, I think the guys have done a fantastic job.

Will we do another one? I don't know. The issue is there aren't that many businesses of scale to be honest. We'll wait and see."

Speaking to at GDC, Day said that Keywords had around $114m in the bank for acquisition activity, saying that between $5m and $20m is his preferred size of purchase.

Overall, Keywords revenue rose by 66 per cent to €250.8m ($282.8m), with gross margin increasing 1.8 per cent to 38.2 per cent.

"The Group delivered a strong performance in 2018 as we increased our share of the growing video games market and expanded our range of services. This considerable progress has further improved our quality of earnings and moved us higher up the value chain with our customers.

"We have started 2019 promisingly, and we are seeing good overall demand for our services across the Group. We are actively reviewing acquisitions from which we will continue to be selective, with many businesses excited about the strong platform Keywords could potentially provide for their services and people.

"This, combined with the likely increase in demand for content driven by the arrival of games subscription and streaming services from new entrants such as Apple and Google, give us confidence in the outcome for the full year.

"Our strengthened market leadership and breadth and scale of service offering enable us to take advantage of the multiple growth opportunities afforded by a market that continues to grow in size and sophistication."

During June 2018, the company opened a new support centre in Poland's Katowice, with hints from Jefferies' equity research analyst Ken Rumph that this outfit is working on "a major game of the day".

PCGamesInsider Contributing Editor

Alex Calvin is a freelance journalist who writes about the business of games. He started out at UK trade paper MCV in 2013 and left as deputy editor over three years later. In June 2017, he joined Steel Media as the editor for new site In October 2019 he left this full-time position at the company but still contributes to the site on a daily basis. He has also written for, VGC, Games London, The Observer/Guardian and Esquire UK.