Sportsflare, an esports betting solutions firm, to be acquired by Entain for $13.3M
Entain has reached an agreement for its latest merger and acquisition deal, acquiring Sportsflare, an esports betting development company that is a subsidiary of Tiidal Holdings.
Entain has agreed to acquire all issued and outstanding shares of Sportsflare under a deal brokered with Tiidal Gaming Holdings, a subsidiary of Tiidal Gaming Group Corp. The purchase price will be held by Tiidal in a holding account for 180 days after closing, during which it may use the funds to meet working capital adjustments or claims from Entain, and up to 20% of the funds to cover deal-related expenses.
The agreement was negotiated at arm's length and is subject to certain conditions, including Tiidal shareholder approval, which will be voted on at a meeting on April 26th, and receipt of all necessary consents. A $500,000 termination fee, payable by Tiidal Holdings to Entain in certain termination events, is also part of the agreement.
"I am incredibly proud of what the Sportsflare team has done over the last year. Given the capital markets environment, we believed it was best to find a great home for Sportflare in order to maximize value for Tiidal shareholders," said Thomas Hearne, Chief Executive Officer of Tiidal. "Sportsflare will be a great fit with Entain's strong presence in the industry and our board of directors is confident that Sportsflare joining Entain is the best long-term solution for its employees and partners."
Sportsflare's innovations include Flash Markets, which enables users to place in-game bets on live esports events.
Total Price and Loan Agreement
Under the purchase agreement, the total consideration for the acquisition is $13.250.000 in cash, subject to standard transaction adjustments. Tiidal, however, will hold the purchase price in an escrow account for 180 days after closing. During this period, Tiidal may use the funds to address any working capital adjustments or claims brought by Entain. Additionally, Tiidal can use up to 20% of the funds to cover reasonable expenses associated with the transaction.
Tiidal Gaming Group Corp., as guarantor, Tiidal Holdings, as guarantor, and Sportsflare, as borrower, entered into a definitive loan agreement with Ladbrokes Group Finance plc, an affiliate of Entain, in connection with a secured credit facility of up to NZD$1,658,470 for the Transaction.
An advance payment of NZD$1,158,470 was made on February 2, 2023, under the loan agreement terms. However, if the purchase agreement is not terminated and the Transaction is not finalised, additional advances of NZD$250,000 will be made in March 2023 and NZD$250,000 in April 2023.
The Facility funds will be used to support the ongoing working capital of Sportsflare, Tiidal Gaming Group Inc., and Tiidal until the Transaction is completed. Tiidal executed a separate security deed in connection with the pledge of all outstanding shares of Sportsflare as collateral for the Facility, in accordance with the loan agreement terms.
Entain PLC Stock:
Copy of official press release "Tiidal Announces Agreement to Sell Sportsflare to Entain"
Entain's continued Esports push
Entain has been making significant investments in the esports industry. The company acquired Unikrn, an esports betting firm, for a reported £50m in 2021, and the company officially relaunched in Brazil the same year.
19th October 2022 - "Completion of Unikrn deal underpins Entain’s launch into esports wagering in 2022"
1st December 2022 - "Unikrn and Entain to launch the most expansive esports betting platform around"
With over 450 million gamers aged 18-35, esports has become a mainstream sport. Entain recognises the significant potential for this demographic to become new customers in other areas of its business, citing data that shows video gamers are more than four times more likely to participate in sports-betting and iGaming than their peers in the same age range.