TIDMFDEV
RNS Number : 9875E
Frontier Developments PLC
02 November 2022
Frontier Developments plc
Acquisition of Complex Games Inc
Frontier Developments plc (AIM: FDEV, 'Frontier' or the
'Company'), a leading developer and publisher of videogames based
in Cambridge, UK , announces the acquisition of experienced game
development studio Complex Games Inc ('Complex'), (the
'Acquisition').
The Acquisition follows the successful collaboration between
Complex and Frontier Foundry ('Foundry'), Frontier's games label
for third-party publishing, on the development and publication of
turn-based strategy game Warhammer 40,000: Chaos Gate -
Daemonhunters, which released in May 2022 to a very positive
reception and is Foundry's most successful game to date.
Founded in 2001 by Noah Decter-Jackson and Adrian Cheater,
Complex has over 21 years of experience in a wide variety of game
genres and platforms. The studio is based in Winnipeg, in the
Canadian province of Manitoba, and employs 20 talented people,
primarily developers.
Rationale for the Acquisition
The Acquisition supports Frontier's strategic objectives:
-- It creates a core development footprint for Frontier in
Manitoba, Canada, a region with an extensive and growing talent
pool for videogame development. Frontier intends to grow the
development team in Winnipeg to support future growth;
-- In the near term, the closer collaboration achieved by the
Acquisition will enable Complex and Frontier to even more
effectively nurture Warhammer 40,000: Chaos Gate -
Daemonhunters;
-- In the medium to long term, the growing development team in
Winnipeg will add to Frontier's game portfolio through the
application of Frontier's develop, launch and nurture strategy,
which will support Frontier's continued delivery of sustainable and
profitable growth
Having worked closely during the development and launch of
Warhammer 40,000: Chaos Gate - Daemonhunters, the Acquisition is
de-risked through a deep mutual understanding and alignment of the
culture, ability, and ambition of the two companies.
Financial Consideration
Frontier has acquired 100% of the shares in Complex for an
upfront cash consideration of CAD$13 million (GBPGBP8.3 million).
Conditional deferred cash consideration of up to CAD$5.16 million
(GBPGBP3.3 million) will be payable subject to Complex meeting
certain operational milestones during the period to 31 December
2023. In addition, the four employee shareholders - the two
founders and the two studio principals - will participate in a 5
year profit-share cash earn-out scheme, which aligns 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
CAD$18.16 million (GBPGBP11.6 million) will be funded from
Frontier's existing cash resources. Frontier's cash balances as at
31 August 2022 were GBP53.1 million.
The additional profit-share earn-out of up to CAD$11.76 million
(GBPGBP7.5 million) payable over 5 years to the four employee
shareholders will be funded from future cash profits generated from
games developed by the Winnipeg studio.
The Acquisition is expected to deliver modest accretive
financial benefits in FY23 and FY24 through a greater level of
profitability for Frontier from the ongoing performance of
Warhammer 40,000: Chaos Gate - Daemonhunters.
Jonny Watts, Frontier's CEO commented :
"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. 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."
Noah Decter-Jackson, Complex Games CEO commented :
"Working with Frontier on Warhammer 40,000: Chaos Gate -
Daemonhunters has been a great experience and I am excited about
our growth plans for our Winnipeg studio. I am really proud of
Complex Games' achievements and I'd like to thank everyone who has
been involved with that success over many years. I look forward to
developing even more great games in the future as part of
Frontier."
There will be a call for analysts and institutional investors at
09:30 this morning. To register please contact
frontier@tulchangroup.com
The information contained within this announcement is deemed to
constitute inside information as stipulated under the retained EU
law version of the Market Abuse Regulation (EU) No. 596/2014 (the
"UK MAR") which is part of UK law by virtue of the European Union
(Withdrawal) Act 2018. The information is disclosed in accordance
with the Company's obligations under Article 17 of the UK MAR. Upon
the publication of this announcement, this inside information is
now considered to be in the public domain.
Enquiries :
Frontier Developments +44 (0)1223 394 300
Jonny Watts, CEO
Alex Bevis, CFO
Liberum - Nomad and Joint Broker +44 (0)20 3100 2000
Neil Patel / Cameron Duncan / Kate Bannatyne
Jefferies - Joint Broker +44 (0)20 7029 8000
Max Jones / William Brown
Tulchan Communications +44 (0)20 7353 4200
Matt Low / Mark Burgess / Alex Dart
About Frontier Developments plc
Frontier is a leading independent developer and publisher of
videogames founded in 1994 by David Braben, co-author of the iconic
Elite game. Based in Cambridge, Frontier uses its proprietary COBRA
game development technology to create innovative genre-leading
games, primarily for personal computers and videogame consoles. As
well as self-publishing internally developed games, Frontier also
publishes games developed by carefully selected partner studios
under its Frontier Foundry games label.
Frontier's LEI number: 213800B9LGPWUAZ9GX18.
www.frontier.co.uk
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