Allied Esports Entertainment has sold the World Poker Tour to private investment group Element Partners in a transaction that could be worth up to $78.25m.
The purchase, approved by the Allied Esports Entertainment board of directors, is expected to close in late January or early February 2021, assuming the company’s shareholders approve the deal and following required regulatory approvals and other customary closing conditions.
Under the terms of the agreement, $68.25m will be paid upfront, with a fully guaranteed revenue share of five per cent 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.
Furthermore, Allied Esports is also exploring strategic options, including a sale, for its esports business, however, no potential or particular buyer has been identified and there are no initial or ongoing negotiations in respect of a potential divestment.
Upon completion of the WPT transaction, and assuming the completion of the possible sale of its esports unit, Allied Esports Entertainment would proceed under a new name as a publicly traded holding company.
This firm says it would focus on using its cash resources to explore opportunities in online entertainment, including but not limited to, real money gaming and other gaming sectors.
Frank Ng, CEO of Allied Esports Entertainment, commented, “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.
“Due to COVID-19’s impact on the company’s overall revenue generation and profitability timeline, we believe the forthcoming sale of the WPT business will garner significant capital and an avenue to determine new opportunities that will deliver accelerated returns for our stakeholders.”
WPT initially went public in 2003 and was later purchased by PartyGaming for $12m, before a 2015 transaction saw the brand acquired by Ourgame International Holdings for $35m.
NASDAQ-listed Black Ridge Acquisition then paid $213.8m to acquire Allied Esports International and WPT Enterprises in 2018, subsequently combining the two under the Allied Esports Entertainment moniker.