Veteran games developer and publisher Codemasters has agreed a deal for Slightly Mad Studios which could rise to £152.2 million.

Founded ten years ago, Slightly Mad developed two Need for Speed Shift games for EA and owns the ongoing Project CARS franchise.

It is currently working on an ‘unannounced Hollywood blockbuster title’ which the gaming press reports is likely to be Fast and Furious.

A share placing at listed company Codemasters has raised the funds for the cash portion of an initial consideration amounting to £23.3m.

Racing specialist Codemasters floated on the London Stock Exchange in 2018 and currently has a market cap of £329m. For the six months to the end of September, its pre-tax profit was £10.6m.

The firm, which has bases in Warwickshire, Birmingham and Runcorn, recently announced that its contract to produce the official Formula 1 game has been extended to 2025.

It also has the only racing title currently available on the Google Stadia streaming console.

“Codemasters’ acquisition of SMS will create a global leader in the racing genre,” CEO Frank Sangier said.

“Their focus on AAA quality and the passion that they put into everything they create mirrors our own.

“Both companies have a number of world renowned, successful franchises along with exciting product development pipelines, supported by leading IP and some of the best talent in the gaming industry.

“The enlarged Codemasters will have greater scale and reach, diversified, predictable revenue streams and the opportunity to bring outstanding entertainment to a far wider audience.”

Slightly Mad CEO Ian Bell will remain head of the studio, which reported turnover of £7.3m and pre-tax losses of £5.2m in 2018.

“Our combined racing games portfolio is the envy of the industry and this new partnership will enable us to learn from each other, share resources and take advantage of emerging platforms and technology,” said founder Bell.

“My team is excited to be joining Codemasters and we can’t wait to forge a relationship based on creativity, passion and the desire to create new racing experiences that excite and delight our communities.”