The American games publisher behind the pandemic sensation Fall Guys: Ultimate Knockout saw its share price rise steeply after making its debut on the London stock market.
Devolver Digital’s stock jumped by 18 per cent after listing on the junior AIM exchange, lifting its valuation above £800 million. The company offered its shares at 157p each at a market capitalisation of £694 million. By the close of trading the stock had risen to 185p.
Devolver sold about £191 million worth of stock in the initial public offering (IPO), including £37 million of new shares. Existing investors, including its founders, took £154 million off the table.
Sony picked up a 5 per cent stake in the IPO and Slater Investments, a London based fund, bought a 4.6 per cent holding. The management team reduced their collective stakes from 52 per cent to 39 per cent.
Devolver has capitalised on the boom in the games sector during the pandemic. Although break-neck growth rates have eased this year, the valuations of London-listed games groups remain sharply higher than their pre-Covid levels.
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Devolver was founded in 2009 by Harry Miller, executive chairman, Rick Stults, Mike Wilson, Graeme Struthers and Nigel Lowrie.
The company started out publishing titles created by independent developers but has bought a number of studios, including two in the UK. Since the beginning of last year, Devolver has acquired five development houses and a second publishing brand. It employs about 200 people.
Since its launch, the company has released about 90 titles, including Hotline Miami, Loop Hero and Fall Guys. Its revenues climbed from $59 million in 2019 to $213 million last year thanks to Fall Guys. Pre-tax profits rose from $10 million to $77 million over the period.
Fall Guys was developed by the British studio Mediatonic and the game became an instant hit when it was launched in August last year. Devolver said it had been the most heavily downloaded PlayStation Plus title in history, with the game generating $151 million revenue by the end of December.
Mediatonic was acquired by Epic, the Fortnite developer, in March, with Devolver selling its publishing to the studio’s new owner. Devolver has retained the merchandising rights for Fall Guys for six years.
