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Codemasters buys Slightly Mad Studios for $30m

Project CARS studio will join the UK publisher in a deal that could rise by $67m based on three-year earnout clause

Codemasters has acquired Project CARS developer Slightly Mad Studios for a $30 million upfront fee.

The acquisition will bring Slightly Mad's racing expertise into the Codemasters organisation, which is also a well established specialist in the genre. The entirety of Slightly Mad's 150-person team will make the transition as part of the deal.

The UK publisher will pay $30 million (£23.3 million) upfront -- $25 million in cash, and $5 million in stock -- but an earnout clause based on Slightly Mad's EBITDA over a three-year period that could take the value higher.

A spokesperson briefed GamesIndustry.biz that the maximum earnout is $166 million (£128.9 million), but the financial analyst Liberum expects the actual amount to be approximately £52.6 million ($67.9 million).

Frank Sagnier, Codemasters

“Codemasters' acquisition of SMS will create a global leader in the racing genre," said Codemasters CEO Frank Sagnier. "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. We welcome Ian and his team to the Codemasters family and can't wait to start working together to create the future generation of racing franchises.”

Codemasters has been making racing games virtually since its inception in 1986, while the London-based Slightly Mad Studios was founded in 2009. However, in its ten years in business, Slightly Mad has established itself as one of the industry's leading racing developers, with the critically acclaimed titles Project CARS in 2015 and Project CARS 2 in 2017.

Codemasters also noted that Slightly Mad has three projects in development: a new mobile game, Project CARS Go; a game based on "a Hollywood blockbuster movie franchise," which is rumoured to be based on the Fast & Furious series; and a third title based on Slightly Mad's own IP.

The $5 million in stock will be payable to Slightly Mad Studios when it launches the game based on a blockbuster movie franchise in the next financial year.

Codemasters will raise £20 million to help finance the deal through a new share placing, at a price of £2.10 per share. However, it expects its earnings per share to rise 30% as a result of the acquisition in the first full year of ownership.

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Matthew Handrahan


Matthew Handrahan joined GamesIndustry in 2011, bringing long-form feature-writing experience to the team as well as a deep understanding of the video game development business. He previously spent more than five years at award-winning magazine gamesTM.