ESE Completes Acquisition of Esports and Gaming Infrastructure Company, WPG
- Transaction is anticipated to make ESE one of the largest esports infrastructure companies in the world, bridging esports companies with their fans and customers.
- In 2020, WPG’s assets generated revenue in excess of $14,000,000.
- The Transaction will add WPG’s existing client base to ESE. Clients of WPG’s subsidiary, WPG Racing Solutions, include one of the largest esports companies in the world, and one of the largest sports organizations.
- Acquisition will deliver on core strategic priorities of increasing revenue, expanding tier-1 client base, strengthening technology stack, expanding operational geography, adding experienced executives to ESE’s management, and increasing platform scalability through WPG’s over 100 staff.
VANCOUVER, British Columbia, April 13, 2021 (GLOBE NEWSWIRE) — ESE Entertainment Inc. (TSXV: ESE) (OTCQB: ENTEF) (the “Company” or “ESE”) is pleased to announce that it has closed the previously-announced acquisition of 51% of the business of World Phoning Group Inc., Encore Telecom Inc., and their two European operating subsidiaries, WPG Racing Solutions and Foresight Resolutions (collectively, “WPG”), effective April 12, 2021.
Under the terms of the Agreement, all of the assets of WPG were rolled into a newly incorporated Canadian company, World Performance Group Ltd. (the “Corporation”), and, pursuant to a share purchase agreement dated February 16, 2021 (the “Agreement”), ESE acquired 51% of the issued and outstanding shares of the Corporation (the “Transaction”). The Corporation will carry on the business of WPG following the closing of the Transaction (the “Closing”), which will allow ESE to further develop its robust esports and entertainment infrastructure business.
WPG’s principal, Wayne Silver, has agreed to serve as the Corporation’s CEO to continue to operate WPG’s business and ensure smooth integration of WPG’s infrastructure into ESE’s existing operations. Mr. Silver has also been appointed to ESE’s advisory board.
WPG is an enhanced solutions provider operating an infrastructure business for management of fan engagement for OTT & esports. WPG works with its customers to build new and improved B2C & B2B processes that align with the customer’s brand, boost retention, enhance fan interaction, improve ROI, and increase sales and profit margins. WPG provides bespoke, omni-channel solutions that encompass the traditional esports channels (voice, chat, email) and embrace new contact channels (Discord, Reddit, etc.) and social media used by millennials and many of today’s younger fans. WPG also offers robust out-sourced network services, including B2B and B2C services, and operates a global telecom network through Encore Telecom Inc.
Wayne Silver, CEO of WPG, commented, “Since December 2020, our team has embraced becoming part of the ESE Family, and we’re now pleased to say it’s official. 2021 is off to a tremendous start for WPG. Since January 2021, we have hired over 45 new agents and a senior Operations Manager. This will be key to helping scale our sales efforts. In addition, we have our sights set to expand our geographic offering into the Middle East. With the added support from ESE’s team, we aim to continue to grow both organically and through acquisitions.”
“Our company vision has been clear from the onset – acquire accretive and synergistic companies alongside organic growth to become the largest global esports company. This is now the second completed acquisition for ESE and we anticipate many more to come. From the moment we signed the WPG LOI in December 2020, we began integrating our two great teams. Wayne and the team at WPG are ready to accelerate operations and surpass our already ambitious expansion plan,” said Konrad Wasiela, CEO of ESE.
The purchase price of the Transaction consisted of: (i) $128,019 in cash paid on Closing; (ii) 585,156 common shares of ESE (each, a “Common Share”) issued on Closing; and (iii) 6,664,845 Common Shares (the “Reverse Vesting Shares”) to be released in monthly installments over the 36 months following the Closing. ESE has also agreed to make an investment of $750,000 in the Corporation to fund its working capital needs.
ESE has the option to acquire the remaining 49% of the issued and outstanding shares of the Corporation (the “Minority Interest”) at any time within 34 months following the Closing by: (i) paying $624,613 in cash; and (ii) issuing 2,500,000 Common Shares. World Phoning Group Inc. and Encore Telecom Inc. (together, the “Vendors”) have the right to sell the Minority Interest to ESE at any time within 34 months following the Closing upon the occurrence of a change of control event (the “Put Option”) in exchange for ESE (i) paying $780,766.88 in cash; and (ii) issuing 3,125,000 Common Shares.
Wayne Silver will act as the Corporation’s CEO pursuant to the terms of an Executive Consulting Agreement (the “Executive Agreement”), which provides, among other things, that Mr. Silver will be entitled to an annual bonus based on the annual audited revenue of the Corporation (the “Performance Bonus”), subject to a limit that the Performance Bonus will be capped at three (3) times Mr. Silver’s annual salary under the Executive Agreement.
If Mr. Silver voluntarily resigns from his position with the Corporation, ESE will have the right to repurchase for cancellation the unreleased portion of the Reverse Vesting Shares as of the date of such resignation for a nominal price. If ESE commits certain material events of default at any time within four (4) years of Closing, the Vendors will have the right to repurchase ESE’s shares in the Corporation at a price established by a formula set out in the Agreement. Such repurchase right will expire four (4) years after Closing. In connection with the Transaction, ESE will issue an aggregate of 435,000 Common Shares to ZDK Holdings Ltd. for providing M&A advisory services in connection with the Transaction.
ESE is a Europe based entertainment and technology company focused on gaming, particularly on esports. ESE consists of multiple assets and world-class operators in the gaming and esports industries. Capabilities include physical infrastructure, broadcasting, global distribution for gaming and esports-related content, advertising, sponsorship support, and a growing esports team franchise, K1CK Esports. ESE is focused on bridging Europe, Asia and North America. | www.ese.gg
WPG is a Canadian and European based infrastructure business for management of fan engagement for OTT & esports. WPG works with its customers to build new and improved B2C & B2B processes that align with the customer’s brand, boost retention, enhance off-site fan interaction, and improve ROI. WPG provides bespoke, omni-channel solutions, that encompass the traditional channels (voice, chat, email), social media channels (Twitter, Facebook) and embracing new community channels (Discord, Reddit, etc.), used by millennials and many of today’s younger fans and Generation Z. | www.wpgrs.org
This news release contains certain statements that may constitute forward-looking information under applicable securities laws. All statements, other than those of historical fact, which address activities, events, outcomes, results, developments, performance or achievements that ESE anticipates or expects may or will occur in the future (in whole or in part) should be considered forward-looking information. Such information may involve, but is not limited to, statements with respect to (i) the expansion of WPG’s operations geographically; (ii) growing WPG’s business through acquisitions; (iii) the ability to scale WPG’s and ESE’s businesses; (iv) the likelihood of ESE acquiring the Minority Interest; (v) the effect of the Transaction on the parties, including the growth prospects of ESE following the Transaction; and (vi) the anticipated benefits associated with the Transaction. Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or variations (including negative variations) of such words and phrases, or statements formed in the future tense or indicating that certain actions, events or results “may”, “could”, “would”, “might” or “will” (or other variations of the forgoing) be taken, occur, be achieved, or come to pass. Forward-looking information is based on currently available competitive, financial and economic data and operating plans, strategies or beliefs as of the date of this news release, but involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements of ESE to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Among other things, there can be no assurance that the Transaction will be completed or that the anticipated benefits from the Transaction will be achieved. Such factors may be based on information currently available to ESE, including information obtained from third-party industry analysts and other third-party sources, and are based on management’s current expectations or beliefs regarding future growth, results of operations, future capital (including the amount, nature and sources of funding thereof) and expenditures. Any and all forward-looking information contained in this press release is expressly qualified by this cautionary statement. Trading in the securities of ESE should be considered highly speculative.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE ESE Entertainment Inc.
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Daniel Mogil, Investor Relations