ESE Entertainment Inc announced plans to acquire gaming technology company GameAddik for over $4.8 million in cash and 7.3 million in ESE shares.
According to ESE, GameAddik generated around $24 million in unaudited revenue during fiscal 2020 and $4.7 million in income from operations.
The gaming company said that the acquisition will help to increase revenue and profitability, expand its Tier One client base and strengthen its technology stack.
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In addition, the deal will help ESE expand its geographic reach, add experienced executives to the management team and increase platform scalability.
Quebec-based GameAddik owns proprietary technology and systems that are tailored to help video game developers reach more users. Its client base includes some of the largest video game developers, according to ESE.
GameAddik reaches 30 million qualified gaming users monthly through its publishing network, which ESE said enables the company to register over 300,000 new players each month.
Under the terms of the deal, ESE will pay a total of $4,812,000 in cash, which is subject to adjustment based on the working capital of GameAddik on closing. The company will issue 7,377,143 shares, and will have the right to repurchase 5,848,163 of the shares for “nominal consideration” if certain revenue milestones are not met by GameAddik for its 2022 to 2024 fiscal years.
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The acquisition of GameAddik is directly aligned with the ESE’s vision and corporate culture, ESE CEO Konrad Wasiela said in a statement.
“It sends a clear message that we are accelerating our growth strategy globally and continuing to make strategic acquisitions,” Wasiela said.
“The financial performance of GameAddik highlights its world-class executive team’s ability to build and scale as a profitable technology company. Through the addition of GameAddik’s IP and technologies, we have confidence that this transaction will supercharge our existing business and take it to the next level. This will be a transformational acquisition for ESE.”
Eric Jodoin, CEO of GameAddik, told investors that ESE’s “solid presence” in the esports market is anticipated to bring a whole new set of growth opportunities to GameAddik.
“Using our specialized expertise in technology and large-scale user acquisition campaigns, GameAddik will be able to power up every asset in the ESE portfolio with enhanced audience reach and monetization capabilities…We believe the synergies are clear, and this transaction will affirm our position as one of the leading companies in the gaming industry,” Jodoin said.
ESE is a Europe-based entertainment and technology company focused on gaming, particularly on esports.
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