Enthusiast Gaming Completes Deferred Payment to "The Sims Resource" Unlocking 100% of EBITDA and Cashflow
Payment made seven months ahead of schedule to acquire 100% economic ownership of largest female online gaming community
Toronto, Ontario--(Newsfile Corp. - September 11, 2019) - Enthusiast Gaming Holdings Inc. (TSXV: EGLX) ("Enthusiast Gaming" or the "Company") is pleased to announce that it has completed, ahead of schedule, the deferred payment obligation related to its previously announced acquisition of the assets of The Sims Resource ("TSR"). The payment satisfied all obligations of the acquisition of TSR from Generatorhallen AB and IBIBI HB, which closed on April 12, 2019.
TSR is the world's largest female online video gaming content and community destination, offering custom content built around the popular Sims™ video game franchise, which can be downloaded by users to alter and/or expand gameplay. TSR fans generated over 2.5 billion page views last year, while the property earned C$7 million revenue - split between advertising and recurring monthly paid subscribers - and C$5.25 million in Adjusted EBITDA. Since Enthusiast Gaming closed the transaction with TSR in April 2019, the number of monthly subscribers has grown nearly 30%.
Enthusiast Gaming utilized part of the available capital proceeds from its recent merger with Aquilini GameCo. and Luminosity Gaming to pay down the deferred payment obligation ahead of schedule and unlock a number of strategic and economic benefits including:
- Increase the number of leading video media and content sites under full ownership. Full ownership and integration allows Enthusiast Gaming to implement an optimized advertising and content strategy to increase revenue and gross margin.
- Ability to leverage paid subscription models across the Enthusiast Gaming platform.
- Unlocks an additional 70% of the EBITDA that had previously been returned to the Vendors, seven months early.
- Highly accretive use of cash proceeds following the completion of merger with Aquilini GameCo.
- TSR management and content creators have joined the Enthusiast Gaming team and are excited to manage the next phase of growth.
Menashe Kestenbaum, President of Enthusiast Gaming commented, "Paying down the deferred payment ahead of schedule to TSR was an extremely important first step for the new Enthusiast Gaming. Having 100% economic and strategic control of TSR provides significant upside potential to increase our revenue/user and value/user - two key metrics for Enthusiast Gaming moving forward." He continued, "Two of our primary growth opportunities include driving revenue through direct sales and adopting monthly, paid subscriber models across our network of video game media sites. Since we announced the acquisition of TSR, we have already seen steady growth of its subscriber base and it will be a key factor in achieving success across both key metrics."
About Enthusiast Gaming
Enthusiast Gaming is one of the largest vertically integrated video game and esports companies in the world. The Company's digital platform includes +85 gaming related websites and 900 YouTube channels which collectively reach 150 million visitors monthly. Enthusiast's esports division, Luminosity Gaming, a leading global esports organization consists of 8 professional esports teams under ownership and management, including the #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. Enthusiast also owns and operates Canada's largest gaming expo, Enthusiast Gaming Live Expo, EGLX, (eglx.ca) with approximately 55,000 people attending in 2018. For more information on the Company, visit www.enthusiastgaming.com. For more information on Luminosity Gaming, please visit luminosity.gg
Head of Investor Relations & Marketing
Certain statements in this release are forward-looking statements. Forward looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements, including risks related to factors beyond the control of Enthusiast Gaming. The risks include risks that are customary to transactions of this nature and customary to companies which have their stock traded on the TSXV. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits Enthusiast Gaming will obtain from them.
This press release does not constitute an offer to sell or solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to a U.S. Person unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/47684