Tencent is on track to buy games company Sumo Group for $1.27 billion, the companies have revealed.
The UK-based games developer, founded in 2003, is best known for its work-for-hire projects including Crackdown 3 and Sackboy: A Big Adventure for which it won two BAFTAs. Some of the studio’s other titles include Little Big Planet 3, Team Sonic Racing and Hood: Outlaws and Legends.
The company maintains 14 studios spanning five countries and employs more than 1,200 staff.
Sumo floated on the London Stock Exchange in 2017 and Tencent’s offer will see Sumo shareholders receive $7.08 (£5.13) per share, an offer that is a 43 per cent increase on Sumo’s previous closing price. Tencent bought a stake in Sumo for $30 million in 2019 and currently is the second biggest stakeholder in the company.
The move comes after Sumo Group saw a 41 per cent increase in sales for 2020, bringing in $95 million.
The acquisition will be the latest from Tencent, who own stakes in several big-name game companies such as Activision Blizzard, Ubisoft, Riot Games and Epic Games.
After approval of the deal, Sumo Group will be the most recent UK games company to be acquired for over $1 billion, following EA’s acquisition of Codemasters earlier in 2021 for $1.2 billion.
“Commited investor”
“The three founders of Sumo, who work in the business, Paul Porter, Darren Mills and I are passionate about what we do and are fully committed to continuing in our roles,” Sumo Group CEO Carl Cavers said in a statement.
The opportunity to work with Tencent is one we just couldn’t miss.
Carl Cavers
“The opportunity to work with Tencent is one we just couldn’t miss. It would bring another dimension to Sumo, presenting opportunities for us to truly stamp our mark on this amazing industry, in ways which have previously been out-of-reach.”
“Tencent is proud to have been an investor in Sumo since 2019, and we view the proposed combination as an evolution of our partnership,” said Tencent’s chief strategy officer James Mitchell.
“Tencent is a committed investor in the game industry, with a track record of supporting the growth of game studios around the world. We hold Sumo’s team and the games they produce in high regard, and its strategy and spirit of innovation have underpinned the success of the business over many years.
“Tencent intends to bring its expertise and resources to accelerate the growth of Sumo both in the UK and abroad, supporting Sumo in the market for top-notch creative talent, and the UK as a hub for game innovation. We believe the proposed transaction benefits all stakeholders, delivers compelling value for Sumo shareholders, while enhancing the Sumo business for the future.”
Tencent shows no signs of slowing down with a reported $19.5 billion in profit for 2020.
