Sheffield video game developer Sumo sees revenue and profit rise ahead of its acquisition

Sumo is set to be acquired by multinational technology conglomerate Tencent Holdings having reached an agreement on the terms of a recommended all cash acquisition by Tencent, through its indirect wholly-owned subsidiary, Sixjoy Hong Kong.

The acquisition is to be implemented by way of a scheme of arrangement. Under the terms of the acquisition, Sumo Group Shareholders will be entitled to receive 513 pence in cash for each Sumo Group share and the entire issued and to be issued share capital is valued at approximately £919m on a fully diluted basis.

The requisite majority of shareholders voted in favour of the scheme and to pass the resolution in connection with scheme. The acquisition remains subject to the satisfaction or waiver of the remaining conditions set out in the scheme document.

Sumo reported £50.4m in revenue for the six months ended June 30, 2021, in the unaudited results. This was up 91.7 per cent from 2020 when in the first half it registered revenue of £26.3m.

Pre-tax profit was up 32.9 per cent from £2.8m to £3.7m.

Carl Cavers, CEO of Sumo Group, said: "The extraordinary has become the norm at Sumo Group. The business has been going from strength to strength, expanding as demand increases in this large and fast-growing global market.

"Our great people continue to deliver great games, which, in turn, are generating strong financial results for the group.

"Then, shortly after the half year end, we announced the recommended all cash acquisition of Sumo Group by Tencent, valuing the business at over £900 million and delivering a very positive outcome for all our stakeholders. This process is ongoing and is expected to complete towards the end of the fourth quarter of the 2021 financial year.

"Since the start of 2021, we have increased the group's capacity through the acquisition of PixelAnt and added an exciting new publishing element to the business, through the launch of Secret Mode in March.

"Timbre Games was launched by Pipeworks in Vancouver in July and, earlier this month, we added Auroch Digital to our growing portfolio of studios via acquisition. Auroch Digital supports our publishing ambition and brings further talent acquisition opportunities in the South West to provide further capacity in games development.

"We are also expanding with the opening of our second Sumo Digital studio in India next year.

"As ever, our focus remains on delivering further strong growth organically and by acquisition and the pipeline of opportunities remains strong.

"We have an encouraging level of visibility on development fees for both 2021 and 2022 and, with our markets continuing to perform strongly, are very confident about the future of the business, which we expect to be under the ownership of Tencent."

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