Sumo, Sheffield gaming firm, buys $100m Pipeworks

Shares of Sheffield-based video gaming firm Sumo Group plc rose about 13% on Wednesday after it said it signed a contract to acquire Lake Street Labs Buyer Corp, the owner of Pipeworks, for an enterprise value of up to $99.5 million.

Sumo Group also published results for the six months ended June 30, 2020, showing revenue rose 26.7% to £26.3 million and pre-tax profit rose 122.1% to £2.8 million.

The Sheffield firm said its results for the full year “will be at least in line with consensus market expectations.”

Sumo Group shares have soared about 40% in the past year to give it a current stock market value of around £350 million.

Sumo said it will pay an initial $59.5 million in the deal for Lake Street Labs Buyer Corp, with $35 million from its existing cash resources and $24.5 million through the issue of new equity in Sumo Group. 

“Founded in 1999, Pipeworks is an innovative, well-established, and respected US video games developer based in Eugene, Oregon,” said Sumo.

“It provides full development, co-development, and live operations to premier video game publishers and other partners.

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

“Pipeworks is also a leader in the application of emerging technology and game science to adjacent complementary markets, including the US public sector, distance learning, remote healthcare, and AI-driven simulation.”

Sumo Group CEO Carl Cavers said: “We are delighted to announce the acquisition of Pipeworks, the largest acquisition Sumo Group has made since IPO.

“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.

“Having known Lindsay for a long time and been a keen follower of Pipeworks, I am naturally delighted to welcome Lindsay and his team to Sumo Group and look forward to working together and sharing an exciting future.  

“This is a major step forward for our business.

“Sumo Group is thriving.

“Our underlying market is very strong, and we are seeing good opportunities for new games, including Original-IP developed by our talented studios.”

Pipeworks CEO Lindsay Gupton said: “We are absolutely thrilled to be joining Sumo Group.

“Our ambition is to be the best and most innovative game developer in North America and this will be a ‘level-up’ for all of us at Pipeworks.

“I’ve known Carl and the team at Sumo for a long time and have the greatest respect for them as a company, as game developers, and most importantly, as people.

“The cultural fit between Pipeworks and Sumo is remarkable, and we all love to make great games with great partners.

“I can’t wait for this next big chapter in the long history of Pipeworks.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.