VANCOUVER, British Columbia, Aug. 16, 2021 — ESE Entertainment Inc. (TSXV: ESE) (OTCQB: ENTEF) (the “Company” or “ESE”) is excited to announce that it has entered into a binding share purchase agreement (the “Agreement”) to acquire 100% of the shares of Auto Simulation Limited T/A Digital Motorsports (“Digital Motorsports”), an Ireland-based provider of advanced simulation racing (“sim racing”) infrastructure, technology, and support.
Under the terms of the Agreement, ESE will acquire 100% of the issued and outstanding shares of Digital Motorsports (the “Transaction”). The purchase price will consist of (i) CAD $1,681,250 in cash payable on the closing of the Transaction (the “Closing”), subject to a customary working capital adjustment; (ii) up to 941,500 common shares of the Company (each, a “Common Share”) issuable on Closing; and (iii) up to 8,473,500 Common Shares (the “Earn Out Shares”) to be released in six equal installments every 6 months (each such installment, an “Installment”), with the first Installment being issuable on December 31, 2021. The Agreement will also contain an earn-out, whereby if DMS does not achieve certain revenue-based milestones during the earn-out period (commencing on execution and ending on January 1, 2027), certain of the security-based consideration under the Agreement will be delayed or withheld. The Company has also agreed to make an investment of €250,000 in Digital Motorsports on closing to fund its working capital needs.
The co-owners of Digital Motorsports have agreed to continue to run the operations of Digital Motorsports after Closing, to ensure continuous business operations and a smooth transfer of Digital Motorsports’ business to the Company, and will enter into employment agreements with Digital Motorsports.
The Transaction is intended to build on ESE’s already strong position in the sim racing market and bring it one step closer to becoming one of the largest gaming and esports infrastructure companies in the world.
Niall Maher, CEO of Digital Motorsports commented, “Digital Motorsports (DMS) has a proven track record of building world class simulators and hosting the most competitive and professionally run online racing leagues and events. We are very proud to have a 5-star customer service rating, thanks to the trust and support of our online community and the tireless efforts of all our employees who make DMS a truly unique place to work and a recognized leader in esports. Over the past 3 years DMS has built a differentiated global brand in the Sim Racing space. With the increasing complexity and advancements of today’s AR/VR Motion Simulators, we believe the demand for turnkey solutions, tier 1 components and professional online racing is poised for years of significant growth. We are extremely excited to now be part of the ESE family and are well positioned to capitalize on this unique opportunity. ESE has the infrastructure, resources, culture, strategy and brand which is aligned to the Digital Motorsports Vision. I firmly believe we have everything in place to be No.1 Globally by bringing game changing new technology, next generation products and unrivalled professional services to the market and realize continued growth and sustained success into the future.”
Konrad Wasiela, CEO of ESE commented, “Our vision, shared alongside Niall and his team, is for Digital Motorsports to become the #1 global brand in esports for the motorsport industry. By combining the resources of ESE and Digital Motorsports, we anticipate excellent synergies to be realized for our business. With the execution of this agreement, we are one step closer towards executing our vision.”
Closing of the Transaction is subject to customary closing conditions, including TSX Venture Exchange approval.
About ESE
ESE is a Europe based entertainment and technology company focused on esports and gaming. ESE’s assets consist of multiple world-class operators in the gaming and esports industries. The Company’s capabilities include but are not limited to: physical infrastructure, broadcasting, global distribution for gaming and esports-related content, advertising, sponsorship support, and a growing esports team franchise, K1CK Esports. ESE is focused on bridging the gap between the European, Asian and North American esports industries. | www.ese.gg