Allied Esports Entertainment and privately-held investment vehicle Element Partners, have entered into a definitive agreement under which Element will acquire Allied’s poker-related business and assets, including the entities comprising the World Poker Tour (WPT).
Under the terms of the agreement, Element will acquire WPT for $78.25m, consisting of a $68.25m upfront payment and a fully guaranteed 5% revenue share of WPT-branded tournament entry fees on Element-owned or licensed gaming platforms, up to a maximum of $10m payable over three years after closing.
Allied’s board of directors has approved the transaction which is expected to close in late January or early February this year, assuming the company’s shareholders approve the transaction and subject to the required regulatory approvals and other customary closing conditions.
2020 saw WPT’s flagship online subscription platform, ClubWPT, increase new registrations by 61% through the third quarter, exceeding registrations during all of 2019.
Total subscription revenue was also up 56% year-on-year in Q3, and 2020 saw WPT hold the largest event in its 18-year history featuring a $100m guaranteed prize pool.
Allied’s board has also agreed to explore strategic options for its esports business, following the rapid growth and popularity of gaming and esports during the novel coronavirus (Covid-19) pandemic, it said.
Options include a possible sale of the business and the company has engaged Lake Street Capital Markets to assist with the process. Presently no particular buyer has been identified and there are no ongoing negotiations relating to the sale of the esports business.
Upon completion of the WPT transaction, and if a sale of the esports business goes ahead, Allied said it 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 real money and other gaming sectors.
Frank Ng, Allied Esports Entertainment’s chief executive, said: “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.”
Ng said that the forthcoming sale of the WPT business will create significant capital for the business, allowing it to determine new opportunities that would deliver accelerated returns for stakeholders.
WPT’s chief executive, Adam Pliska, said: “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.”