Consideration includes $68.3 million in cash
plus an additional $10 million revenue share earn-out
Allied Esports Entertainment, Inc. (NASDAQ: AESE) (the
“Company”), a global esports entertainment company, and Element
Partners, LLC (“Element”), a privately-held investment vehicle,
today announced a definitive agreement under which Element will
acquire the Company’s poker-related business and assets, including
the entities comprising the World Poker Tour® (“World Poker Tour,”
or “WPT®”).
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 licensed
gaming platforms, up to a maximum of $10 million, payable over
three years after closing. The Company’s Board of Directors has
approved the transaction, which is expected to close in late
January or early February 2021, assuming the Company’s shareholders
approve the transaction and following required regulatory approvals
and other customary closing conditions.
Furthermore, the rapid growth and popularity of gaming and
esports during the COVID-19 pandemic has driven strategic interest
in the Company’s esports business, Allied Esports, and the
Company’s Board has agreed to explore strategic options for the
esports business, including a possible sale. The Company has
engaged Lake Street Capital Markets to assist with the process. At
this time, no potential or particular buyer has been identified and
there are no initial or ongoing negotiations in respect of the sale
of the esports business.
Upon completion of the WPT transaction, and assuming the
realization and completion of the possible sale of the esports
business, Allied Esports Entertainment 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 but not limited to, real money gaming and other gaming
sectors.
Frank Ng, CEO of Allied Esports Entertainment, commented,
“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.”
Mr. Ng continued, “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 World Poker Tour has grown considerably since its 2002
inception. Today, its iconic television show is seen worldwide by
more than 150 million people annually, WPT events are held on five
continents, and the company has awarded more than $1 billion in
prize money. WPT initially went public in 2003 and was later
purchased by PartyGaming for $12 million and a related revenue
share. In 2015, the Company was purchased for $35 million by
Ourgame International Holdings Limited and then acquired by
NASDAQ-listed Black Ridge Acquisition Corp. with a value of $50
million in 2019 as part of a larger deal that led to the listing of
the company as Allied Esports Entertainment.
2020 was an exceptional year for WPT’s online and interactive
services pillars of its business model. With in-person events
postponed or cancelled due to COVID-19, WPT’s flagship online
subscription platform, ClubWPT, increased new registrations by 61%
through the third quarter of 2020, exceeding registrations during
the full year of 2019. Total subscription revenue for ClubWPT was
also up 56% year-over-year during the same time. The shift online
also fostered WPT’s largest event in its 18-year history with 2,130
entries for the WPT Online Championship on partypoker and the
company’s largest series, also on partypoker, the WPT World Online
Championships featuring a $100 million guaranteed prize pool.
The WPT television show, which has been on linear television
since 2003, also reached new heights in distribution in 2020,
peaking in global viewership on both linear and OTT platforms last
year. In the third quarter of 2020, OTT household viewership
increased 368% compared to the same period in 2019, while third
quarter 2020 linear household viewership was up 77% over the prior
year period.
Adam Pliska, the long-time CEO of the WPT, stated, “I want to
thank Frank Ng and the entire AESE management team for its support
in allowing WPT to flourish during this period. My management team
and I are excited about this next chapter and the tremendous new
opportunities for the WPT brand and business.”
About Allied Esports Entertainment
Allied Esports Entertainment, Inc. (NASDAQ: AESE) is a global
esports entertainment venture dedicated to providing transformative
live experiences, multiplatform content and interactive services to
audiences worldwide through its strategic fusion of two powerful
entertainment brands: Allied Esports International, Inc. (Allied
Esports) and the World Poker Tour (WPT).
Allied Esports is an award-winning, innovative esports company
comprised of a global network of dedicated esports properties and
content production facilities. Its mission is to connect players,
streamers and fans around the world through integrated arenas,
including its flagship venue, HyperX Esports Arena Las Vegas, its
fleet of mobile esports trucks, the HyperX Esports Trucks, the
HyperX Esports Studio, and affiliate members of the Allied Esports
Property Network, which serve as both competition battlegrounds and
everyday content generation hubs.
World Poker Tour is the premier name in internationally
televised gaming and entertainment with brand presence in
land-based tournaments, television, online, and mobile. WPT ignited
the global poker boom in 2002 with the creation of its iconic
television show, now in its 18th season, based on a series of
high-stakes poker tournaments. ClubWPT.com is a unique online
membership platform that offers inside access to the WPT.
For more information about Allied Esports Entertainment, Inc.
and its subsidiaries, please visit AlliedEsportsEnt.com.
Forward Looking Statements
This press release includes “forward looking statements” within
the meaning of the “safe harbor” provisions of the United States
Private Securities Litigation Reform Act of 1995. When used in this
press release, the words “estimates,” “projected,” “expects,”
“anticipates,” “forecasts,” “plans,” “intends,” “believes,”
“seeks,” “may,” “will,” “should,” “future,” “propose” and
variations of these words or similar expressions (or the negative
versions of such words or expressions) are intended to identify
forward-looking statements. These forward-looking statements are
not guarantees of future performance, conditions or results, and
involve a number of known and unknown risks, uncertainties,
assumptions and other important factors, many of which are outside
the control of the parties, that could cause actual results or
outcomes to differ materially from those discussed in the
forward-looking statements. Important factors, among others, that
may affect actual results or outcomes include: the ability to meet
Nasdaq’s continued listing standards; the Company’s ability to
execute on its business plan; the ability to retain key personnel;
potential litigation; the ongoing effects of the COVID-19 pandemic;
and general economic and market conditions, impacting demand for
the Company’s services. These and other risk factors are discussed
in Company reports filed with the Securities and Exchange
Commission. The Company does not undertake any obligation to update
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise, except as required by
law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210119005198/en/
Investor Contact: Lasse Glassen Addo Investor Relations
lglassen@addoir.com 424-238-6249
Media Contact: Brian Fisher Allied Esports Entertainment
brian@alliedesports.com
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