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  • iCandy Interactive (ICI) raises $40 million to buy Southeast Asia-based game art and animation specialist Lemon Sky Studios
  • Lemon Sky has completed concept art, 3D modelling and animation services for some of the biggest AAA game developers on the planet
  • iCandy is buying out Lemon Sky for 135 million Malaysian ringgit, or roughly $44.5 million, with the help of a $40 million placement to institutional investors
  • iCandy says its takeover of Lemon Sky is designed to help the company grow its position in the video gaming industry, which is forecast to be worth $360.6 billion by 2025
  • Shares in iCandy were up 7.41 per cent and trading at 14 cents each at 12:14 pm AEDT

iCandy Interactive (ICI) has raised $40 million to buy Southeast Asia-based game art and animation specialist Lemon Sky Studios.

Founded in 2006, Lemon Sky has a portfolio of partnerships with major game developers including Microsoft Studios, Blizzard Entertainment, Naughty Dog, 2K Games and more.

The company has completed concept art, 3D modelling, and animation services for some of the biggest names in the AAA gaming world, such as Ratchet and Clank, Overwatch, Death Stranding, and Diablo II: Resurrected.

Now, iCandy is buying out Lemon Sky for 135 million Malaysian ringgit, or roughly $44.5 million.

The deal will be completed through a mix of cash and scrip, with iCandy to pay the vendors MYR54 million (A$17.8 million) in cash and MYR81 million (A$26.7 million) in iCandy shares.

To help fund the deal, iCandy has tapped institutional investors for $40 million through a two-tranche placement, will all of the new shares to be issued at 11.5 cents each. This price represents an 11 per cent premium to iCandy’s 15-day volume-weighted average price.

As part of the placement, billion-dollar gaming company Animoca Brands has increased its stake in ICI by investing another $10 million into the company.

iCandy said it will put $17.8 million towards the Lemon Sky purchase, with the rest to be split among staffing and marketing costs and buying up additional infrastructure.

Why the buy?

iCandy and Lemon Sky already have a business relationship, with the companies working as joint venture partners of mobile game development company Sky Candy.

Now, by joining forces, the combined iCandy and Lemon Sky entity will have over 450 full-time employees with expertise in game-making, concept development, animation, 3D modelling, software development and more.

iCandy said the combined entity will be able to leverage this expertise to develop AAA games for the ‘metaverse’, which has grown in popularity over recent weeks following an announcement from social media giant Facebook that it was changing its name to Meta.

As iCandy puts it, the metaverse is an emerging tech concept where users can play and work in a computer-generated world through virtual and augmented reality.

iCandy said its takeover of Lemon Sky is designed to help the company grow its position in the video gaming industry, which is forecast to be worth $360.6 billion by 2025.

Shares in iCandy were up 7.41 per cent and trading at 14 cents each at 12:14 pm AEDT. The company has an $82 million market cap.

ICI by the numbers
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