40 percent of Codemasters sold off

While most eyes are on the shenanigans surrounding the sale of the UK's biggest publisher, Eidos, a smaller drama has played out in the UK game industry. Yesterday, Codemasters, the privately held developer and publisher of the Colin McRae Rally series, said it had sold 40 percent of the company to venture capital fund Benchmark Capital Europe.

The money raised by the sale--the amount of which was not specified--will be used to hasten next-gen game development, move Codemasters into online gaming, increase distribution, and expand its sales and marketing teams, according to the company.

Codemasters is calling the sale a "significant investment," although it rarely stops there. VC funds often acquire an interest in a company that they later parley into profit, often through a sale. Codemasters declined to comment on whether that might be a likely scenario.

In a statement, Codemasters chairman and CEO David Darling said, "Codemasters has grown organically to become the largest privately owned video games publisher in Europe. Benchmark's investment, and also the involvement of Benchmark's highly talented team, will now provide the perfect opportunity for Codemasters' next growth phase."

The dealmaker behind the Codemasters investment is Benchmark Europe's newest partner, Ynon Kreiz, who was hired in January. He was given access to Benchmark's $375 million war chest and charged with moving the fund into media companies. As far as games are concerned, mission accomplished.

Kreiz comes to Benchmark from his position of chairman, president, and CEO of Fox Kids Europe (FKE). Kreiz was involved in growing FKE into one of the leading children's channels in Europe and the Middle East. He was also involved in the strategy behind program distribution, consumer products, and online and interactive businesses for the channel in more than 50 countries.

Kreiz said he was attracted to the 18-year-old publisher by its "heritage of great management, creativity, innovation, and ambition to push boundaries."