Chinese tech giant Tencent Holdings has announced it has agreed to acquire Sheffield games developer Sumo Group in a deal that values the listed firm at £919m.
The boards of both firms have agreed on the terms of a recommended all cash acquisition along with Sumo’s agreement to Tencent’s offer of 513p a share.
Sumo Group, one of the UK’s largest independent developers of video games with studios in Sheffield, Newcastle, Nottingham, Leamington Spa, Warrington and Pune, India, reported a 40% revenue growth in 2020 to £68.9m earlier this year.
Carl Cavers, chief executive officer of Sumo, said: “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. 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.”
“From a single studio in Sheffield, Sumo now totals 14 studios in five countries, spread across the globe, with more than 1,200 people. Sumo is and always has been a people business and great people make great games and enjoy great times. I am proud to lead such a talented and creative group of individuals.
James Mitchell, chief strategy officer and senior executive vice president of Tencent, added: “Tencent is pleased to have been an investor in Sumo since 2019, and we view the proposed combination as an evolution of our partnership. 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-tier creative talent, and the UK as a hub for game innovation. We believe the proposed transaction benefits all stakeholders, and delivers compelling value for Sumo shareholders, while enhancing Sumo’s capabilities for the future.”
