A massive deal hit the Esports space Friday morning when Enthusiast Gaming Holdings (TSXV:EGLX) (OTCQB:EGHIF) announced a merger with J55 Capital Corp. (TSXV: FIVE) and Aquilini GameCo Inc. to form a leading publicly traded global Esports and gaming organization.
This announcement comes just a week after GameCo announced the acquisition of globally recognized Esports organization Luminosity Gaming Inc., a company that provides management and support services to players involved in professional gaming and is also the manager of the Aquilini-owned Vancouver Titans franchise in the Overwatch League.
The merger between Enthusiast, GameCo and Luminosity will create a global Esports and gaming organization with $22 million in pro forma revenue, $36 million in cash and a combined global audience of roughly 200 million.
On top of that, merged assets and reach will include seven sports teams, including management of the Vancouver Titans Overwatch League franchise, 40 Esports influencers, over 80 gaming media websites and more than 900 YouTube and Twitch channels.
“Our vision has always been to build the largest, vertically integrated Esports and gaming company in the world,” said Enthusiast Gaming CEO Menashe Kestenbaum. “The merger with Aquilini GameCo and Luminosity was a strategic decision that positions us as a dominant player in the gaming industry and unlocks access to Luminosity’s 50 million dedicated Esports fans and one of the largest Esports franchises.”
“Through our successful monetization strategy, we will gain extremely valuable knowledge and information on the demographic that will revolutionize the advertising opportunities we can offer to brands and sponsors,” he added.
Enthusiast Gaming | Strategically Positioned for Success
The deal will provide Enthusiast with significant strategic and financial benefits and will position Enthusiast Gaming to leverage Luminosity’s Esports brand. Through its monetization and ad tech platform, the company will utilize Luminosity and its significant reach to produce engaging advertising experiences.
What’s more, GameCo’s relationship with the NHL’s Vancouver Canucks team and Rogers Arena will give Enthusiast access to a slew of new sponsors who are looking to gain access to the gaming and Esports markets.
The merger is also expected to improve margins for Enthusiast Gaming. A combination of the net funds from GameCo’s concurrent private placement and cash-on-hand will be used to repay all or part of the Sims Resource Deferred Payment, which is approximately $14 million USD. Once fully repaid, it will add roughly $2.5 million of EBITDA to the combined company by reducing expense allocation.
EGLX’s Unlimited Growth Potential
As mentioned, the merger will form a leading Esports and gaming organization that boasts one of the largest media reaches in the sports and gaming space. It will also become the leading publicly listed Esports and gaming organization by revenue and market cap.
The deal between Enthusiast, Luminosity, and GameCo will also create an impressive management team that draws on the extensive experience each company brings to the table.
Although the new organization will have an impressive reach of roughly 200 million, the companies believe there is still a ton of room to grow that network with their combined expertise and technology.
Enthusiast Gaming’s extensive media network and gamer data, combined with Luminosity’s championship caliber teams and brand equity, is expected to drive further audience growth. Add to that Aquilini GameCo’s significant reach and it’s evident that the growth potential for this newly formed Esports and gaming organization is unlimited.
“We are incredibly excited about the merger with Enthusiast Gaming,” said founder and president of Luminosity, Steve Maida. “Pairing our collective following of over 50 million with their 150 million monthly visitors presents significant growth opportunities with respect to content, partnerships, advertising, events and more.”
The Esports industry has been growing exponentially, creating a lot of buzz for investors who are interested in the space. This massive deal between Enthusiast Gaming, Aquilini GameCo and Luminosity will no doubt add to the growing interest in the Esports and gaming industry, which is expected to reach $1.1 billion in revenue this year.
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