A Sunderland computer games company has been bought in a deal that could be worth as much as £65.5m.
Coatsink has been bought by Swedish company Thunderful Group for an initial £23m, with an earn-out component that could add £43.5m to the acquisition fee.
The deal has been done in a mixture of cash and shares in Thunderful, with a number of key Coatsink employees becoming shareholders in the Gothenburg-based company. The earn-out consideration, which will also be a mix of cash and Thunderful shares, will be paid Coatsink exceeds financial targets for 2021 and 2022.
Coatsink - which was established by friends Tom Beardsmore and Paul Crabb in 2009 - will remain an independent development studio and will be reported as part of Thunderful Games.
The deal has been hailed as another example of the thriving computer games scene in the North East.
Coatsink CEO Tom Beardsmore said: "It's wonderful for Coatsink to have reached this milestone.
"The company has been built on successful partnerships; with our team members, our external partners, and our support network here in the North East. We wouldn't have achieved this without any of them, and we're so grateful for that.
"The North East is a truly great place to build a tech business and we're excited about our future as part of Thunderful Group."
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Thunderful Group CEO Brjann Sigurgeirsson said: “We have established a good relationship with the founders and key personnel of Coatsink and believe that their strong work ethics and corporate culture will be a very valuable strong complement to Thunderful’s existing businesses.
“Although it’s just a first step, this is a good example of how we intend to leverage the Group’s powerful cash flow going forward.”
Coatsink - named after an imaginary evil corporation run by a former teacher of both founders - was founded in Teesside in 2009 and later moved to Sunderland. It is currently based at Sunderland Software City and has around 100 employees.
The studio has built a strong reputation in the computer games industry, with recent games including the Oculus Quest launch title Shadow Point, a development partnership with Boneloaf on Gang Beasts, and a publishing partnership on the hit title Onward.
The firm was named on Creative England’s CE50 list of the country’s top emerging creative companies, and recently worked with Star Trek actor Sir Patrick Stewart on one of their games.
It is currently working on five projects, some of which are yet to be announced, as well as several work-for-hire and publishing projects.
Thunderful was advised on the deal by Newcastle law firm Muckle. The corporate team at Newcastle based Mincoffs Solicitors advised the shareholders at Coatsink on the sale.