Frontier Developments acquires Canadian studio Complex Games
By Josh White
Date: Wednesday 02 Nov 2022
(Sharecast News) - Video games developer and publisher Frontier Developments announced the acquisition of "experienced" Canada-based game development studio Complex Games, it announced on Wednesday.
The AIM-traded firm said it acquired 100% of the shares in Complex for an upfront cash consideration of CAD 13m (£8.3m).
Conditional deferred cash consideration of up to CAD 5.16m would be payable, subject to Complex meeting certain operational milestones during the period to the end of 2023.
Additionally, the four employee shareholders - the two founders and the two studio principals - would participate in a five-year profit-share cash earn-out scheme, aligning with Frontier's strategy to develop, launch and nurture new games developed by the Winnipeg studio.
The total maximum upfront and deferred consideration of up to CADm 18.16m would be funded from Frontier's existing cash resources, with its cash balances totalling £53.1m at the end of August.
Frontier said the additional profit-share earn-out of up to CAD 11.76m over five years to the four employee-shareholders would be funded from future cash profits generated from games developed by the Winnipeg studio.
The acquisition was expected to deliver "modest" accretive financial benefits in the 2023 financial year and in 2024, through a greater level of profitability for Frontier from the ongoing performance of Warhammer 40,000: Chaos Gate - Daemonhunters.
Its board said the acquisition followed a successful collaboration between Complex and Frontier Foundry on the development and publication of the turn-based strategy game, which was released in May to a "very positive" reception and was Foundry's most successful game to date.
"When we launched our third-party publishing strategy in 2019 we were excited by the potential to align our Frontier Foundry development partners more formally with Frontier through acquisition," said chief executive officer Jonny Watts.
"Our experience with Complex Games on Warhammer 40,000: Chaos Gate - Daemonhunters has been terrific, and I am delighted to welcome Noah and the team to Frontier, with a view to growing and evolving our development team in Manitoba, Canada.
"This is Frontier's first acquisition and we will continue to explore opportunities to grow Frontier's resources to further develop and nurture our portfolio."
At 1227 GMT, shares in Frontier Developments were up 1.97% at 1,344p.
Reporting by Josh White for Sharecast.com.
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