Listed Sheffield video games firm Sumo Group has acquired Huddersfield-based Red Kite Games in a £2 million deal.

Red Kite was established by ex-Rockstar Games developer Simon Iwaniszak in 2012 and is a work-for-hire studio focusing on engineering and code support services which employs 27 people.

Sumo Group, an award-winning provider of creative and development services to the video games and entertainment industries, said in a statement to the London Stock Exchange that it had agreed a deal for a total consideration of circa £2m.

The net consideration is around £1.5m as Red Kite has been acquired with approximately £500,000 of cash on the balance sheet.

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“Red Kite is an established brand with talented people, providing engineering and code support services to some of the biggest names in the industry,” said Sumo CEO Carl Cavers.

“Simon and his team are already well known to us and we are confident that Red Kite will integrate quickly and successfully. On behalf of the whole group, I extend a warm welcome.”

Simon Iwaniszak, studio director of Red Kite, added: “We are very much looking forward to being part of Sumo Group. Sumo Digital is such an exciting business, working on incredible projects.

“Being part of a creative, ambitious and supportive group, which is delivering great results, will present new opportunities and new challenges to Red Kite.

“We have exciting plans for the studio and believe that Sumo Group will help us to achieve our full potential.”

Sumo said the deal will give it access to a new talent pool in West Yorkshire. It has worked successfully with Red Kite for several years, collaborating on a range of titles.

Red Kite has recently worked with Codemasters on DiRT 4, Sony Computer Entertainment on God of War III: Remastered and Activision on Call of Duty: Strike Team.

Sumo Group made a £1.8 million loss before tax in the first six months of 2018, although revenue and profits grew by more than half.

Last year it snapped up Brighton-based The Chinese Room for more than £2m.

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