Sumo acquires former Rockstar man's studio

Video games developer Sumo Group has acquired work-for-hire studio Red Kite Games for a total of £2m in order to support the group's growth strategy across West Yorkshire.

Sumo paid £500,000 in cash for Red Kite on Friday and will issue a total of 1.16m new ordinary shares to the sellers on the first anniversary of the deal's completion.

The AIM-listed group expects Red Kite, founded by former Rockstar developer Simon Iwaniszak in 2012, to contribute roughly £200,000 towards EBITDA in its current trading year.

The business will continue to operate under the Red Kite name, as a wholly owned subsidiary of Sumo.

Chief executive Carl Cavers said: "Red Kite is an established brand with talented people, providing engineering and code support services to some of the biggest names in the industry."

"Simon and his team are already well known to us and we are confident that Red Kite will integrate quickly and successfully."

As of 0930 GMT, Sumo shares had inched forward 0.39% to 129p.