Esports entertainment company Allied Esports has announced the sale of the World Poker Tour to investment group Element Partners.
The agreement sees Element purchase Allied Esports’ poker-related business and assets for a total of $78.25m (~£57.35m). In addition, the firm has also announced its intention to ‘explore strategic options’ for its esports business.
Under the terms of the acquisition, Element will pay $68.25m (£50,05m) upfront either in January or February. The remaining $10m will be received via a five percent guaranteed revenue share of WPT-branded tournament entry fees on Element’s gaming platforms.
Frank Ng, CEO of Allied Esports Entertainment, commented: “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.”
Regarding the company’s sale of its esports business, Allied Esports has enlisted Lake Street Capital Markets to assist with the process. The firm has confirmed that as of this writing, there have been no ‘initial or ongoing’ negotiations.
Ng added: “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.
“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.”
If a potential sale of the company’s esports business was to be successful then, according to the release, Allied Esports would continue under a new name. Ultimately the firm’s intention is to then use its cash resources to ‘explore opportunities in online entertainment’, such as real-money gaming among other sectors.
Esports Insider: Allied Esports has suffered a lot during the pandemic, partially due to its esports assets having to temporarily close, with a variety of events being cancelled as a result. It seems that the company is looking to go into a different direction this year with the sale of WPT and the intended sale of its esports business.