Acquisition: Versus Evil and Red Cerberus

TinyBuild Inc. has finalized the acquisition of Versus Evil, a global video game publisher, and Red Cerberus, a Brazil-based AAA-grade service provider. This strategic move is designed to scale the company’s publishing pipeline, diversify its genre portfolio, and internalize essential development and quality assurance services. By integrating these entities, the company aims to enhance its intellectual property discovery capabilities and leverage a broader geographical footprint to facilitate expansion into Latin American markets.

The financial structure of the deal involves an upfront cash payment of $12.5 million, supplemented by a deferred contingent consideration of up to $18.8 million payable in shares over three years, bringing the total maximum consideration to $31.3 million. In 2020, the combined entities generated $12 million in revenue with an EBITDA loss of $0.2 million. The acquisition is projected to be marginally accretive in 2021 and approximately 10% accretive in 2022, with expectations for increased returns in subsequent years.

The acquisition is part of a broader 2021 growth strategy that included multiple "acquihire" transactions across the United States and Russia. Following these integrations, the company reports a global presence with over 400 staff members, a portfolio exceeding 70 published games, and approximately 30 titles currently in the development pipeline. The integration strategy emphasizes a partnership approach, focusing on cultural alignment, the retention of key talent, and the acquisition of rights for future sequels to strengthen the company's long-term franchise development.