Allied Esports agrees $78.3m sale of World Poker Tour20th January 2021 9:00 am GMT
New York-listed Allied Esports Entertainment has agreed to sell its World Poker Tour (WPT) business and assets to Element Partners for a total consideration of $78.3m.
The acquisition comprises an initial upfront payment of $68.3m in cash and an additional $10m revenue share earn-out based on 5 per cent of WPT-branded tournament entry fees on Element-owned or licensed gaming platforms.
“Despite the many challenges caused by the COVID-19 pandemic, the WPT business has delivered substantial, impactful results, specifically through its online platforms and services, and has made meaningful contributions for the company,” said Allied Esports Entertainment CEO Frank Ng. “In addition, Allied Esports, with its world-renowned HyperX Esports Arena Las Vegas and best-in-class production services, has generated market attention as the esports industry gained momentum during the pandemic.
“Due to COVID-19’s impact on the company’s overall revenue generation and profitability timeline, we believe the forthcoming sale of the WPT business will garner significant capital and an avenue to determine new opportunities that will deliver accelerated returns for our stakeholders.”
The WPT initially went public in 2003 and was later purchased by PartyGaming for $12m and a related revenue share. In 2015, the company was purchased by Ourgame International for $35m and then acquired by NASDAQ-listed Black Ridge Acquisition Corp. for $50m in 2019 as part of a larger deal that led to the listing of the company as Allied Esports Entertainment (AESE).
“I want to thank Frank Ng and the entire AESE management team for its support in allowing WPT to flourish during this period,” said WPT CEO Adam Pliska. “My management team and I are excited about this next chapter and the tremendous new opportunities for the WPT brand and business.”
Allied Esports said that the rapid growth and popularity of gaming and esports during the COVID-19 pandemic had also driven strategic interest in the company’s esports business.
As a result, the company’s board has agreed to explore strategic options for its esports business, including a possible sale, and has engaged Lake Street Capital Markets to assist with the process.
Upon completion of the WPT transaction, and assuming the realization and completion of the possible sale of the esports business, Allied Esports would proceed, under a new name, as a publicly traded holding company focused on using its cash resources to explore opportunities in online entertainment, including real-money gaming and other gaming sectors.
Shares in Allied Esports Entertainment Inc (NSQ:AESE) soared by 17.09 per cent to close at $1.85 per share in New York Tuesday.