StockMarketWire.com - Video games developer Sumo said it had agreed to acquire US-based rival Pipeworks for up to $99.5m, including debt.

Sumo also a reported a more than doubling of first-half profit as demand for gaming soared during lockdowns.

Pre-tax profit for the six months through June increased to £2.8m, up from £1.3m year-on-year, as revenue climbed 27% to £26.3m.

Sumo said it would pay an initial sum of $59.5m to Pipeworks owner Lake Street Labs Buyer Corp, with $35m coming from its cash reserves and $24.5m via an equity issue.

New shares in Sumo would be issued at 190p each.

A subsequent earnout consideration of up to $40m would be payable based on the performance of Pipeworks in calendar 2020 and 2021, settled partly in cash at a proportion of 30-70%, with the balance in Sumo shares.

Oregon-based Pipeworks provided full development, co-development and live operations to video game publishers and other partners, Sumo said.

Since foundation, Pipeworks it had shipped close to 100 games and advanced technology solutions to nearly 50 clients and partners.

'We are delighted to announce the acquisition of Pipeworks, the largest acquisition Sumo Group has made since IPO,' chief executive Carl Cavers said.

'The acquisition gives us an instant, established and significant presence in the important North American market, with improved access to both new and existing clients and markets.'

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