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Enthusiast Gaming Holdings Inc (2)
Symbol C : EGLX
Shares Issued 71,398,036
Close 2019-09-17 C$ 2.40
Recent Sedar Documents

Enthusiast Gaming to acquire Steel Media

2019-09-18 07:57 ET - News Release

Mr. Menashe Kestenbaum reports

ENTHUSIAST GAMING TO ACQUIRE STEEL MEDIA, A LEADING MOBILE GAMING MEDIA AND EVENTS COMPANY

Through its wholly owned subsidiary, Enthusiast Gaming Properties Inc., Enthusiast Gaming Holdings Inc. has entered into a share purchase agreement to acquire all of the shares of Steel Media Ltd., a leading mobile gaming and live events company.

Steel Media owns 20 mobile gaming media websites including two PocketGamer websites, the AppSpy and 148apps websites; and is the owner and operator of over 25 video game networking events across 11 countries, including key markets such as the United States and United Kingdom. Pocket Gamer is the world's leading destination for the mobile gaming community, including iPhone, iPad, Android, Nintendo Switch, 3DS and more. As one of the most recognized brands in the mobile gaming industry, Pocket Gamer has over two million monthly impressions on mobile and Web, and covers multiple sites, events and even printed magazines.

Steel Media is also an industry leader in business-to-business and consumer mobile gaming events. It owns and operates numerous successful networking events around the world with 15,000 registered industry attendees and key sponsors and partners. Steel Media hosts Pocket Gamer Party, Top 50 Developer Guide, Mobile Mixers, the Mobile Games Awards and its feature event, Pocket Gamer Connects, the largest B2B mobile games conference series, with events in locations such as London, San Francisco, Helsinki and Seattle with additional locations coming soon. The Steel Media team will continue operating the business and led by its chief executive officer, Chris James.

The acquisition of Steel Media unlocks a new audience segment for Enthusiast Gaming, the highly coveted and rapidly growing mobile gaming segment. Further, the acquisition aligns with Enthusiast Gaming's strategy of growing its total audience reach across the entire gaming market through accretive acquisitions both within its on-line media segment and expanding events business. Combined with Steel Media, Enthusiast Gaming's digital network will reach more than 100 properties and significantly increases its mix of owned and operated sites in its network.

Menashe Kestenbaum, president of Enthusiast Gaming, commented: "We have seen a significant increase in mobile gaming and it continues to be a huge segment within the overall gaming industry. The acquisition of Steel Media aligns with our growth strategy through M&A and also the continued expansion of our events division." He continued, "Steel Media has built a well-recognized brand and successful businesses across mobile, B2B and events that will allow us to continue capitalizing on the growth of mobile gaming and drive further revenue synergies across two of our three pillars, media and events."

The agreement

Pursuant to the terms of the agreement, Enthusiast Gaming has agreed to (i) a cash payment of approximately $2,969,000 (U.S.) with $1,968,536 (U.S.) to be paid on closing ($1-million (U.S.) net of cash on hand) and the balance to be paid on the first anniversary of the date of closing and (ii) issue $500,000 (U.S.) worth of common shares in the capital of the company at a deemed price per share equal to the five-day volume-weighted average trading price. In addition, Enthusiast Gaming has agreed to an earnout payment of up to $500,000 (U.S.) based on the performance of Steel Media.

The agreement remains subject to TSX Venture Exchange approval. Any common shares issued in connection with the agreement will be subject to a 12-month hold period from the date of issuance.

About Enthusiast Gaming Holdings Inc.

Enthusiast Gaming is one of the largest vertically integrated video game and e-sports companies in the world. The company's digital platform includes over 85 gaming-related websites and 900 YouTube channels which collectively reach 150 million visitors monthly. Enthusiast's e-sports division, Luminosity Gaming, a leading global e-sports organization, consists of eight professional e-sports teams under ownership and management, including the No. 1 ranked Overwatch team, the Vancouver Titans, and over 50 gaming influencers with a total audience of 60 million followers. Collectively, the community reaches over 200 million gaming enthusiasts on a monthly basis.

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