$WinkingStudios (WKS.SG)$ Winking Studios has proposed the a...

Winking Studios has proposed the acquisition of Malaysian art and animation outsourcing company Pixelline Production.

On Apr 8, the company entered into a non-binding memorandum of understanding (MOU) with Pixelline's owners Lee Jie Way and Beh Yit Xian for the proposed acquisition.

As part of the MOU, Winking Studios may choose to acquire all the fixed assets, moveable assets, intangible assets and the services of certain existing employees of Pixelline through its subsidiary.

The company says that the proposed acquisition is in line with its business strategy to pursue strategic acquisitions to expand its sales and capabilities and increase its market presence globally.

The consideration of the proposed acquisition will be determined and agreed upon between the Winking Studios and Pixelline's owners on a willing buyer and willing seller basis.

The company will provide updates on the proposed acquisition when there have been material developments.

UOBKH has initiated coverage on Winking Studios, in anticipation of a surge in game popularity in the coming years and the group's healthy operating cash flow. Analyst Heidi Mo has a "buy" call with a target price of 35 cents.