Sheffield games company bought for £919m by Chinese giant behind Fortnite
Sheffield games company Sumo Digital has been snapped up by a Chinese firm in a deal hailed as an ‘outstanding return for shareholders’.
Tech giant Tencent Holdings first invested in Sumo in 2019 when it was valued at £248m. Headquartered in Sheffield, Sumo has 14 studios in five countries and more than 1,200 employees.
Sumo's non-executive chairman Ian Livingstone said: "The Board of Sumo firmly believes the business will benefit from Tencent's broad videogaming eco-system, proven industry expertise and its strategic resources.”
He also said it gave an ‘outstanding return for shareholders’.
Tencent reportedly owns a 40 per cent stake in Epic Games, which makes the hugely popular video game Fortnite.
Sumo's shareholders will get 513 pence in cash per share, Tencent said. The offer is at 43 per cent premium to the Sumo's last closing price of 358p. The share has risen multifold since its listing on LSE's junior market AIM in 2017 at 100p.
Carl Cavers, Sumo’s CEO, said: “In the 18 years since we founded Sumo, we have developed more great games than we could ever have imagined and enjoyed incredible trust and support from our clients, enabling us to grow into a global business, delivering consistently strong financial results.”
Tencent had a strong track record for backing management teams and the future for Sumo was ‘more exciting than ever’, he added.
“Sumo will continue to work with these clients to break new ground and create even more fantastic games. We look forward to strengthening our growth prospects through the application of Tencent’s strategic resources to our own-IP, turn-key development work ambitions, and possible acquisition opportunities,” he said.
James Mitchell, chief strategy officer and senior executive vice president of Tencent said: “We are pleased to have been an investor in Sumo since 2019, and 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.