Enthusiast Gaming Acquires Addicting Games for $34.4m

? Acquisition

• Toronto-based entertainment platform and esports event company Enthusiast Gaming Holdings (TSX: EGLX, NASDAQ: EGLX) has acquired US-based casual games website Addicting Games for $34.4m, including $22m upfront paid 45% in cash and 55% in shares
• The purchase price consists of:
  • An upfront payment of $10m in cash and $12m in shares, subject to a statutory hold period and a contractual lock-up with 50% released 12 months following the closing date and 50% released 24 months following the closing date
  • $7m deferred payment to be paid in Sep’22 and $3.8m in Sep’23 in cash or shares. Any common shares issued in connection with the deferred payments will be subject to a contractual lock-up with 25% being released every 3 months after issuance
  • The assumption of a convertible debenture, dated APR 10, 2019, of approximately $1.6m inclusive of principal and accrued interest to the closing date
• The acquisition is in line with Enthusiast Gaming’s growth strategy. Addicting Games gives Enthusiast more MAU interested in casual gaming and unlocks new streams such as in-game purchases while getting more revenue opportunities and resources to develop new titles

?  Product

• Addicting Games is an online portal that provides an extensive library of over 1.5 thousand casual game titles spanning action, sports, puzzles, etc. Many of the games offer subscriptions and in-app purchases. The platform has approximately 10 million MAU
• Games, portals, and brands acquired as part of the deal:
  • Addicting Games
  • Shockwave
  • TypeRacer
  • ioGames Space
  • Little BIG Snake
  • Diep.io
  • EV.io
  • Mope.io
  • MathGames

? Previous investments/M&As

• • In Sep’21, Enthusiast Gaming acquired GameKnot, the owner of chess fan community GameKnot.com, for $2.75m
  • In Jun’21, Enthusiast Gaming acquired technology and data platform Tabwire, the owner of TabStats, for $11m
  • In May’21, Enthusiast Gaming acquired Vedatis, which owns independent Activision Blizzard fan community Icy Veins, for $8.5m (€7m, €1=$1.22)
  • In Aug’20, Enthusiast Gaming acquired Omnia Media from Blue Ant Media Solutions for a total of about $13.3m$ (CAD 16.75m, CAD1=$0.79)
  • In Sep’19, Enthusiast Gaming merged with Aquilini GameCo, the owner of Luminosity Gaming

  Sources: ENTHUSIASTGAMING, SEC