iCandy is continuing its aggressive M&A trail as it moves to become a global AAA metaverse gaming powerhouse with a key German acquisition to get a fingerhold in the European market.

Aussie game developer iCandy Interactive (ASX:ICI) has announced it has signed a binding agreement to acquire a 60% stake in German gaming backend tech company Flying Sheep Studios for €2 million ($3 million).

Founded in 2014, Flying Sheep Studios is led by a team of experienced software engineers and has an impressive track record of game development and gamification with more than 50 brands worldwide.

The company has delivered more than 200 games to clients including DreamWorks Animation and recorded more than €321,000 ($484k) in revenue in its fiscal year ending December 2021.

Flying Sheep Studios’ inhouse HTML5 developer capabilities provides for on time, quality games with its web technology that is size-and speed-efficient with cleaner and neater  code, as well as reduce load on servers.

HTML5 also supports rich media elements which enable media material plays and reduce plugin needs – designed for cross platform usability without downloads nor installation.

Flying Sheep Studios has developed a wide range of proprietary software  to improve capabilities of HTML5 beyond traditional 2D technology.

With its inhouse developer tools, Flying Sheep Studios has progressed ahead to building games that  provide fluid 3D graphics that rival native apps.

Expansion into Europe

The acquisition of Flying Sheep Studios marks iCandy Group’s footing in the European  gaming market.

The European gaming market is projected to be worth US$27.4 billion in  2022 in the video games segment.

At present, iCandy stands as the largest independent  game developer in Australia, New Zealand and Southeast Asia.

In February the company completed a $44.5 million 100% acquisition of Lemon Sky Studio, which establishes the Aussie-listed studio at the summit of gaming across Southeast Asia.

The company has been undertaking an aggressive M&A strategy to build a global integrated Metaverse gaming platform, while capitalising on another emerging trend of NFT gaming.

iCandy has also acquired a majority 51% stake in gaming studio Storms, alongside three of Asia’s top telcos Singtel, AIS and SK Telecom.

As part of the deal the three Flying Sheep Studios founders – managing director Thomas Rӧssig, technical director Daniel Nienhaus, creative director Benjamin Cid Pérez – have signed a three-year management contract to continue leading the company post acquisition.

Clear synergies

iCandy said the acquisition of Flying Sheep Studios will enhance shareholder values with business synergies between the two companies.

The acquisition is expected to facilitate iCandy’s venture into metaverse  gaming by improving its gaming backend tools and capabilities, especially with Flying Sheep Studio’s HTML5 technology portfolio.

iCandy will also add to its existing talent pool of more than 600 with the integration of  Flying Sheep Studio’s experienced team of developers and software engineers.

The deal expected to propel iCandy Group’s vision of becoming a global AAA  metaverse gaming powerhouse.

The company last month reported strong Q1 FY22 including its highest cash intake ever, up by 1150% to $4.5 million compared to $400k in the previous quarter.

The iCandy share price has risen more than 3% on news of its latest acquisition to 6.7 cents.

This article was developed in collaboration with iCandy Interactive, a Stockhead advertiser at the time of publishing.

 This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.