Enthusiast Gaming Holdings Inc. is pleased to announce that it has, through a wholly-owned subsidiary, signed a definitive agreement to purchase 20% of the issued and outstanding shares (“Purchased Shares”) in Waveform Entertainment Inc. (“Waveform”) for an aggregate consideration of $1,680,000 (the “Subscription Price”). Waveform is a leading esports broadcast and production company specializing in the organization of premium esports tournaments world-wide. Enthusiast has also secured an irrevocable option, at its sole discretion, to acquire a 100% interest in Waveform. (the “Buy-Out Option”).
While Waveform was established in 2018, its team has been on the leading edge of esports event production and broadcast for several years, servicing some of the world’s most prestigious esports tournaments and events including Dreamhack, Cineplex WorldGaming, and Enthusiast owned, EGLX.
“Investing in Waveform will contribute greatly to the expansion of EGLX and our events business. Waveform’s infrastructure and expertise are key for the roll out of the Rising Star Series and upcoming esports tournaments at EGLX in the future,” commented Menashe Kestenbaum, CEO of Enthusiast. “We were very impressed by the organization of our esports tournaments at EGLX in October 2018 and we see significant growth potential as esports continue to soar.”
Waveform was responsible for the broadcast, production and execution of Canada’s largest esports tournament, WESG Canadian Finals at EGLX in October 2018. Enthusiast will continue to partner with Waveform as EGLX executes on its North American expansion plan and introduces the Rising Stars Series this summer. Waveform will provide the infrastructure, broadcast and event support to drive the expansion and continued growth of EGLX in 2020.
As esports continues to grow with $1.1bn in projected revenues in 2019, large brands are entering the industry by sponsoring esports teams and championing their own activations. Waveform has partnered with major brands including Evil Geniuses, Virtus Pro, Ubisoft, AMD, Asus, Team Liquid and more. The investment into Waveform will help Enthusiast’s mission to reach gamers both online and offline. The Company will provide digital advertising and experiential marketing opportunities to major brands and publishers, increasing visibility and event attendance. The partnership enables Enthusiast’s event business to increase its client services portfolio to include event production, broadcast, streaming services and creative experiential brand ambassadorship programs. In turn, the partnership also allows Enthusiast’s platform to promote Waveform’s business and portfolio of large brands and help them drive new partnerships moving forward.
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Terms of Transaction
The Purchased Shares will be purchased pursuant to the terms of a share subscription agreement (the “Agreement”), among Waveform and a wholly owned subsidiary of Enthusiast created for the purpose of the transaction. Pursuant to the Agreement, Enthusiast agreed to purchase the Purchased Shares in three tranches: (i) on April 4, 2019, Enthusiast purchased 40.5% of the Purchased Shares for a portion of the Subscription Price, being $680,000.00; (ii) Enthusiast agreed to purchase, on or before (as decided by Enthusiast) October 4, 2019, 29.75% of the Purchased Shares for a portion of the Subscription Price, being $500,000.00; and (iii) Enthusiast agreed to purchase, on or before (as decided by Enthusiast) June 3, 2020, 29.75% of the Purchased Shares for a portion of the Subscription Price, being $500,000.00. On the date Waveform and Enthusiast entered into the Agreement, they also entered into a Shareholders’ Agreement for Waveform (the “Shareholders’ Agreement”). The aggregate purchase price for all Waveform’s shares, if the Buy-Out Option is exercised by Enthusiast shall be equal to the greater of: (i) four (4) times Waveform’s gross revenue (as defined in the Shareholders’ Agreement), multiplied by eighty percent (80%); or (ii) $7,680,000 (the “Option Purchase Price”). The Option Purchase Price will be subject to agreed adjustments. The purchase of the Purchased Shares on the two remaining tranches, as well as the exercise of the Buy-Out Option (if exercised by Enthusiast) are subject to obtainment of all applicable regulatory approvals (including by the TSX Venture Exchange).
About Enthusiast Gaming
Founded in 2014, Enthusiast is the fastest-growing online community of video gamers. Through the Company’s unique acquisition strategy, it has a platform of over 80 owned and affiliated websites and currently reaches over 75 million monthly visitors with its unique and curated content and over 50 million YouTube visitors. Enthusiast also owns and operates Canada’s largest gaming expo, Enthusiast Gaming Live Expo, EGLX, (eglx.ca) with over 55,000 people attending in 2018. For more information on the Company, visit www.enthusiastgaming.com.
(Image) Source: Press release