Motorsport Games, a racing game developer, on Feb. 19 agreed to buy KartKraft from Black Delta for an undisclosed sum. KartKraft is a PC kart racing simulator.
Under the terms of the deal, Motorsport (MSGM) will take ownership of KartKraft's intellectual property along with game assets and code.
Furthermore, the company will form a new studio, Motorsport Games Australia, to continue the development of KartKraft. Members of the original KartKraft development team along with founder Zach Griffin are expected to join the studio.
Stephen Hood, President of Motorsport Games, said, “This acquisition further demonstrates Motorsport games’ commitment to the racing game genre and our belief in the future of virtual racing. We are delighted to have the opportunity to add KartKraft and form a new development team within the Motorsport Games family.”
At present, KartKraft is in the early process of providing access on Steam for PC. The full release will enable players to build their own karts and race on 10 licensed tracks with 20 official kart manufacturers.
This acquisition further enhances Motorsport’s product portfolio, content development and digital product sales abilities while also expanding its esports ecosystem, the company announced. (See Motorsport Games stock analysis on TipRanks).
On Feb. 8, Benchmark Co. analyst Mike Hickey initiated coverage on the stock with a price target of $42 (45% upside potential) and a Buy rating.
Hickey commented, “MSGM develops and publishes racing games and immersive esports experiences of the world’s most iconic races and brands including NASCAR, 24 Hours of Le Mans, FIA world Endurance Championship and British Touring Car Championship. MSGM competes at the intersection of motorsports, gaming and esports. We estimate MSGM has $67 million in cash and $10 million in debt.”
The rest of the Street has a Moderate Buy consensus rating on the stock. That’s based on 2 Buys. The average analyst price target of $41 implies 41.4% upside potential to current levels.
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