Sheffield-based Sumo Digital has begun preparations for a £150m float.
The computer games developer, creator of titles such as Sonic & Sega All-Stars Racing, has enlisted Zeus Capital to advise on a listing in London, City sources said.
Co-founders Carl Cavers and Paul Porter stand to reap a windfall from the listing, having retained sizeable minority stakes.
The private equity firm Perwyn has majority control of the business, following a buyout in September last year.
Sumo employs about 400 people across sites in Sheffield, Nottingham and the Indian city of Pune.
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The company, founded in 2003, was named best large independent studio at the TIGA awards last year. It produces games for devices including Xbox, Wii and PlayStation.