Swedish game developer Starbreeze AB has acquired 90.5% stake in Indian art production and game development company Dhruva Interactive for $8.5 million (nearly Rs 57.6 crore).
About $7 million (almost Rs 47 crore) of the total deal amount will be paid in cash, whereas the remaining would be in newly issued Starbreeze B-shares, the company said in a statement on Friday.
Through the acquisition, Starbreeze aims to secure its art production needs, improve the quality of its in-house production projects and lower operating costs.
"It will also enable Starbreeze to provide full end-to-end services to its participating publishing partners and to add significant value to its VR (virtual reality) ecosystem," the company added in the statement.
As part of the acquisition, the Bengaluru-based Dhruva, a division of Dhruva Infotech (P) Ltd, will continue to operate under its own brand and service its clients in the global gaming industry.
"We have worked with Dhruva Interactive for several years and know them well. I am confident that bringing Dhruva into the Starbreeze family will strengthen Starbreeze as a global entertainment company," said Starbreeze chief executive Bo Andersson-Klint.
Founded by Rajesh Rao in 1997, Dhruva's core business is providing game content creation services across various platforms and genres. The company provides end-to-end game client and server development services for mobile phones, tablets and PCs. It has developed personal computer (PC) and mobile games like the N64 Mission: Impossible, Forza Horizon and Kaun Banega Crorepati, among others. Its art studio offers animation, in game integration, concept art, game art and mobile services. For several years, the company claims to have provided the major part of the art asset production for PAYDAY 2.
In 2013, Dhruva launched an incubator called Gametantra targeting mobile game developers. As part of the 6-month incubation programme, the company offered developers with office space and mentorship in return of 3-7% stake.
Dhruva employs over 320 people, and has three studios with two in Bengaluru and one in Dehradun.
In the financial year ending March 2016, Dhruva's revenues amounted to $4.6 million, Starbreeze stated.
The deal contains an earn-out agreement of no more than $0.8 million over the next four years.
Dhruva Interactive's ongoing outsourcing business will have a limited but positive impact on Starbreeze revenue and profit from day one, the company said.
The deal is expected to close at the end of the first quarter 2017, subject to approval processes for foreign investors in India.