The co-founders of Portland-based smartphone app developer Brainium Studios are leaving the company as part of its $70 million sale, announced Thursday, to Las Vegas-based Playstudios Inc.
Even so, the company and its employees will remain in Portland, a local executive confirmed to the Business Journal. No layoffs are expected as part of the sale.
As co-owners, Jake Brownson and Farhad Shakiba, former Oregon Institute of Technology schoolmates, will split the $70 million in half, according to Brainium's Scott Willoughby, who has served as chief operating officer. "That's money that goes with the founders on their merry way," Willoughby said. Brainium Studios is a limited liability company that filed for organization in Oregon in 2009, and the founders owned the LLC outright.
"The owners have not been actively involved in the management of the company for quite some time, and they were just at a point where they decided they were ready to move onto their next chapter, whatever that may be," Willoughby said. "Brainium's ready to move onto its next chapter of growth."
Last spring, the company outlined ambitious hiring plans when it had 29 people on board, but as of Thursday, it had 34 workers in Portland, underscoring the difficulties of the up-and-down economy of the past few years. Video games enjoyed vast popularity during the pandemic when people were largely staying at home. But Willoughby, who previously worked for tech giants Amazon and Microsoft, said the gaming market has changed.
"It's a more and more challenging place to operate, and so we knew for Brainium to continue to thrive and be successful, we had a couple of choices," he said. "We could make massive investments in trying to build out certain technologies and capabilities that we need internally over the next couple of years, or we could partner with a larger company that could provide us with those things off the shelf and give us those synergies and support that we need."
Still, he said the studio plans to continue hiring and has added four people in the past few months.
"We obviously have space for it in our very large office," Willoughby said.
The company will maintain its offices at the Tanner Point building, for which it signed a nearly 23,000-square-foot lease in 2020, and Willoughby will stay on as the studio's main executive, taking a general manager title.
Playstudios agreed to an additional earnout payment if Brainium generates an adjusted earnings before interest, taxes, depreciation and amortization amount of at least $8.8 million, public filings show. Playstudios will pay 10 times the increment over that $8.8 million. So if, for instance, the company generates $11.5 million, then the earnout would be $2.7 million times 10, or $27 million, according to the filings. The maximum such payment allowed per the deal terms is $27.25 million.
—Pete Danko of the Portland Business Journal contributed to this article.
