Quatrro sells game testing firm Babel Media to Irish company Keywords for $8.8M

By Anuradha Verma

  • 20 Feb 2014

Dublin-headquartered Keywords Studios Plc, a technical services provider to the global video games industry, has acquired game testing company Babel Media Ltd from Quatrro Global Services Pvt Ltd and DE Shaw Group for around £5.3 million ($8.8 million).

As part of the acquisition, AIM-listed Keywords Studios will issue stock worth £2.2 million to the shareholders of Babel Media besides cash to settle Babel Media’s debt worth £3.1 million.

Babel Media was founded in 1999 and is one of the most recognised services brands in the video games industry. The company achieved revenues of £6.4 million and EBITDA of £0.4 million with net assets of £1.44 million after adjusting for the loans being repaid, as per the unaudited management accounts for the 10-month period ended January 31, 2014.

It is based in Brighton, the UK with operations in Europe, North America and Japan. It has facilities in New Delhi, India; and Montreal, Canada.

Six years ago, Raman Roy-led Quatrro BPO, backed by US-based hedge fund DE Shaw Group, acquired Babel Media, a provider of specialist outsourced services to gaming and interactive entertainment industry.

As part of the transaction, DE Shaw also picked a minority stake in Quatrro besides its holding in Babel Media and also provided leverage finance for the acquisition. Quatrro held majority stake in Babel Media.

“This divesture is a win-win for both companies. While it allows us to focus on our core business lines, it will also provide Babel Media with the right platform for the next phase of its growth,” Raman Roy, chairman and CEO of Quatrro, said.

Babel Media's strengths are in localisation testing, functional testing and the translation of video games. Combining the two businesses will broaden Keywords' function testing capability (which accounted for less than 3 per cent of its group turnover in the first half of the current financial year) whilst providing substantial operational synergies with Keywords’ existing localisation testing and translation activities and client relationships.

"The acquisition of Babel brings together two of the leading video games testing and localisation providers, firmly establishing Keywords as the market leader in its field, with operations across Dublin, Rome, Montreal, Seattle, Tokyo and now in New Delhi,” Andrew Day, CEO of Keywords, said in the statement.

He said adding India to its global locations, with its significant cost advantages, is another important step in both enhancing group margins and enabling its clients and prospects to benefit from a range of services differentiated by cost, flexibility, time zone, scalability and languages offered.

(Edited by Joby Puthuparampil Johnson)