The two companies have entered into an agreement for the total sum of $78,250,000
The global Esports entertainment company - Allied Esports Entertainment and Element Partners, a privately-held investment company, announced today that they have finalised an agreement that will see Element acquire the Allied Esports Entertainment Inc.'s poker-related business and assets, including the entities making up the World Poker Tour®.
Under the terms of the agreement:
Element will acquire World Poker Tour for a total of $78,250,000, consisting of a $68,250,000 upfront payment and a fully guaranteed revenue share of 5% of WPT-branded tournament entry fees on Element-owned or licenced gaming platforms, up to a maximum of $10 million, payable over three years after closing.
Allied’s Board of Directors have approved the transaction, which is expected to close in late January or early February 2021, assuming the company’s shareholders approve the transaction and follow required regulatory approvals and other customary closing conditions.
Furthermore, Allied’s board stated that it has also agreed “to explore strategic options for its esports business, following the rapid growth and popularity of gaming and esports during the Covid-19 pandemic.”
If Allied Esports would sell WPT and its esports business, it would change its name and “use its cash resources to explore opportunities in online entertainment, including but not limited to, real-money gaming and other gaming sectors.”
CEO of Allied Esports Entertainment, Frank Ng, stated
“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. 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.”
The CEO of Allied Esports Entertainment also added that COVID-19 had an effect on the decision due to the company's overall revenue generation and profitability timeline being effected by the pandemic.
Therefore, Mr. Ng believes that the sale of the WPT business will help the company collect a high amount of capital and an "avenue to determine new opportunities that will deliver accelerated returns for our stakeholders."
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