Home news Liberum on pole for £250m Codemasters float

Liberum on pole for £250m Codemasters float

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The publisher of Formula One’s official series of video games is lining up City bankers to help launch a £250m-plus stock market flotation.

Sky News has learnt that the Indian owners of Codemasters are close to appointing Liberum, the investment bank, to oversee the listing later this year.

The plans, which are at an early stage, reflect strong interest from institutional investors in the sector, which continues to grow rapidly amid booming demand for high-quality games on mobile devices.
Codemasters is one of the oldest names in Britain’s video games industry, and first tried to go public more than a decade ago, before abandoning the plan.
The company, which produces F1-branded games for the Playstation 4 console and mobile platforms, has been majority-owned by Reliance Big Entertainment Limited (RBEL), which is affiliated to one of India’s largest conglomerates, since 2013.
Founded in 1986 by brothers David and Richard Darling, the company originally made games for the Commodore PC and Spectrum console.
It is now focused on racing games, and includes DiRT Rally and Micro Machines among its portfolio of titles.
The founders sold their remaining stake in 2007 to Balderton Capital, an investor in technology-led companies, while Goldman Sachs, the Wall Street bank, also took a financial interest in the company.
The move was designed to be the precursor to a flotation but was abandoned when it became clear that Codemasters needed to refinance its then-indebted balance sheet.
The company is loss-making, making it difficult to assess its likely value as a public company, although one City source said it was likely to be worth up to £300m when it floats.
Codemasters’ revived plan to go public comes at a time of fast-growing demand for games which can be played on the billions of mobile devices used by consumers globally.

Codemasters Group Holdings’ latest set of annual accounts filed at Companies House, which cover the year to 31 March, highlight a “golden era of growth” for the gaming industry.
“New platforms and devices, greater accessibility and a variety of business models are all contributing to reach more gamers, anywhere and at any time,” the company said.?
“The prospect of (Artificial Reality/Virtual Reality), the growing popularity of competitive gaming with eSport, the addition of engaging digital services and the proliferation of new platforms and technologies enabling more social activity and more immersion will lead to continued growth for many years to come.”
Codemasters’ accounts cited research estimating that the global video games market will be worth $119bn by 2019, with the eSports sector likely to be worth $40bn by 2020.
That prospective growth underlines the recent rush of games publishers to the market.
Sumo Digital, the independent Sheffield-based games developer behind Sonic Sega All-Stars, plans to list on London’s junior Aim market, while Team17, which makes the Worms games franchise, is seeking to raise tens of millions of pounds from new investors.
Liberum has a strong track record in the sector, having overseen a share placing last year for Frontier Developments, another videogame developer.

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Since that deal, the company’s shares have soared by more than 50%.
Codemasters and Liberum both declined to comment on Tuesday.?

Source: SKY