The Conversation (0)
WIth plans to list on the NASDAQ, together the companies have pro forma revenues of C$22 million and a C$55 million cash position.
The proposed merger between Enthusiast Gaming (TSXV:EGLX,OTCQB:EGHIF), J55 Capital (TSXV:FIVE) and Aquilini GameCo announced in June is shaping up to be one of the most notable of the year in esports.
On Tuesday (August 27) the companies announced that its shareholders unanimously voted in favor of the merger arrangement at its annual and special shareholder meeting. The merger is anticipated to close in September with the application for the final order from the court scheduled on Thursday (August 29).
The new entity, called Enthusiast Gaming Holdings, will become a wholly owned subsidiary of J55. After the merger is completed, its shares will be delisted from both the TSX Venture Exchange and the OTCQB Venture Market.
Combined, the companies have 200 million viewers, eight esports teams and 900 YouTube channels. According to the companies, the new company will become the largest publicly traded esports company in the world.
In essence, the merger is creating a diversified, vertically integrated entity. Enthusiast Gaming also manages EGLX, the largest esports event in North America. In 2018, its EGLX Live Expo event attracted over 55,000 attendees. Its 85 websites receive 30 billion ad requests per month.
As part of the merger, J55 is undergoing the following share consolidation: 1.25 pre-consolidation J55 shares will be exchanged for one post-consolidation share, effective as of August 26.
In addition, J55 plans to move forward with a second eight for one share consolidation, in which eight post-first-consolidation shares will be exchanged for one post-second-consolidation J55 share, under the name of Enthusiast Gaming Holdings.
In a conference call with investors, Adrian Montgomery, CEO of the combined entity, spoke about how Aquilini GameCo entered the esports industry. Montgomery previously was the CEO of Aquilini Sports and Entertainment, a company that owns the Vancouver Canucks, Rogers Arena and a number of other sports teams.
In 2018, Rogers Arena hosted the Dota 2 The International 8 tournament in a sold out, six day event. The International is the foremost esports event globally. Montgomery noted that during the event, several sales records were broken. Merchandise sales, concession sales and even noise records blew the roof.
“From that moment on, we plunged head first into esports because we thought it was such an exciting growth area,” said Montgomery.
Since then, Aquilini GameCo went on to purchase a team for Activision’s (NASDAQ:ATVI) Overwatch League team while making plans to go public.
Julia Becker, head of investor relations and marketing for Enthusiast Gaming, said on the call that the new entity plans to list its shares on the NASDAQ, although no timeline has been given.
Since the announcement on Tuesday, shares of Enthusiast Gaming increased 3.36 percent, rising to C$1.54 at market close on Wednesday (August 28).
Don’t forget to follow us @INN_Technology for real-time news updates!
Securities Disclosure: I, Dorothy Neufeld, hold no direct investment interest in any company mentioned in this article.
