Games studio Sumo Digital has been bought by a private investment firm after a period of huge growth.
The Sheffield-based development studio was sold by Manchester-based private equity business NorthEdge Capital to Perwyn in what was reported to be a multi-million-pound deal.
Sumo Digital has worked on major franchises including Little Big Planet, Forza Horizon, Disney Infinity, Dead Island and Sonic & All Stars Racing.
It is currently working on sandbox third-person shooter Crackdown 3 for the Xbox One, a title which is expected to “redefine open world gaming”.
Sumo Digital team outside Sheffield HQ
“Our people are at the core of everything we do at Sumo and with major projects such as Crackdown 3 and Dead Island 2 under way, it is an exciting time for us,” said Carl Cavers, CEO at Sumo Digital.
“We operate in a high growth, global market and the pace of technological development and the changing ways in which users consume video games present a great opportunity for the business.”
NorthEdge helped the management team lead a buyout of the firm from previous American owners Foundation 9 Entertainment in 2014.
Sumo’s revenues have risen 60 per cent since then, standing at £21.6million last year, with staff numbers rising from 110 to 350. Profits have more than doubled at £1.7m (pre-tax) last year.
Carl Cavers, second from left, was part of Sumo management buyout in 2014
NorthEdge has seen a 4.4x return on its original investment with the sale.
“Sumo is a great example of a northern business delivering digital services to a global, blue chip client base and it has been a pleasure to work alongside a first class management team during a very exciting growth period,” said Andy Ball, partner at NorthEdge Capital.
“The business has developed into a genuine market leader and the quality of the current project pipeline is testament to the creative and technical expertise of its people.”
Cavers added: “NorthEdge has been an excellent partner for Sumo, supporting the business with both capital and expertise to help us achieve our growth ambitions.
“Their proximity and local decision-making has been a great advantage given the pace at which we have evolved.”
Sumo hopes to recruit 50 staff for the studio it recently launched in Nottingham.
“We are delighted to have Perwyn working alongside us as we embark on the next stage of our journey,” said Cavers.
“They have demonstrated a deep understanding of Sumo, our culture and the market in which we operate and we look forward to partnering with them.”
The corporate finance team at KPMG advised North Edge on the deal, while Perwyn was advised by PwC and Ashfords.
Graham Pearce of KPMG
Graham Pearce, KPMG’s head of tech, media and telco in the North, said: “The video game sector is the fastest growing area of the media and entertainment industry.
“This distinction makes it highly sought after and we’re seeing a healthy pipeline of private equity interest in related-businesses across the region.
“The console market has a strong heritage in the North and particularly across South Yorkshire, providing employment to thousands of the region’s skilled workers.
“Leading firms, including Sumo Digital, work closely with local universities and colleges to develop specialist courses and build a talent pool that will encourage investment from the world’s largest brands.”