Allied Esports Entertainment, Inc has signed a definitive agreement to sell off its entire poker-related business and assets, including the entities comprising major international poker brand the World Poker Tour (WPT), to growth equity firm Element Partners, LLC.
Allied Esports is a Nasdaq-listed eSports and poker venture formed in 2019 and jointly owned by Chinese online games operator Ourgame International Holdings and Minnesota-based oil and gas company Black Ridge Acquisition Group.
Under the terms of the deal, Element will acquire the WPT for a total of US$78.25 million, comprising a US$68.25 million upfront payment plus a fully guaranteed revenue share of 5% of WPT-branded tournament entry fees on Element-owned or licensed gaming platforms, up to a maximum of US$10 million and payable over three years after closing.
The transaction is expected to close in late January or early February.
“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,” said Allied Esports CEO Frank Ng.
“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.”
Allied said it is also exploring opportunities to sell its eSports business and has engaged Lake Street Capital Markets to assist with the process, although no potential buyer has yet been identified.
Should such a sale take place, “Allied Esports Entertainment 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 but not limited to, real money gaming and other gaming sectors,” it said.
The WPT has long been one of the world’s leading poker brands. It is credited with helping spark the global poker boom of the early 2000s via its late night tournament broadcasts featuring insightful commentary from Mike Sexton and Vince Van Patten.