Russian company Mail.ru Group has revealed plans to merge its esports property ESforce with Singapore-based game publisher Modern Pick.
ESforce is the parent company of organisation Virtus.pro, tournament organiser EPICENTER, publication Cybersport.ru, production company RuHub, and esports venue Yota Arena.
Mail.ru Group already holds 3% of the shares in Modern Pick and, per a release, plans to transfer 51% of shares – worth an estimated value of $56 million – in ESforce to the Singaporean company. According to Mail.ru Group, the value of the merged company will be $350 million (£280.4 million) and it will retain the 49% share of ESforce.
Mail.ru Group’s share will be reevaluated in 2022 based on financial performance, with a clause that allows it to exit the merged company and reclaim the 51% shares in ESforce should it wish. It also has an option to fall back on the deal if conditions surrounding fundraising and asset consolidation aren’t met.
Vladimir Nikolsky, COO at Mail.ru Group commented in a release: “We are very pleased to be entering into this new business together with Modern Pick, the strong partner who works in close cooperation with such brands as ZDF, Red Bull, etc. We are pleased with the progress that ESF has made since our acquisition but we see larger opportunities for the business being part of a wider eco-system.
“This is entirely constant with our strategy of leveraging our dominant position in our home market while also working with partners in some areas. We look forward to working with our talented and energetic partners to further expand ESF’s reach and user offering.”
ESforce was acquired by Mail.ru in January last year for a reported $150 million, joining the likes of Virtus.pro and SK Gaming. The latter was sold to FC Köln and Daimler AG at the beginning of this year.
Esports Insider says: We’re not sure how to judge this move yet as it’s not explicitly obvious what the first moves will be for the newly-merged company. These valuations sounds great but where are they really coming from and how have they been decided upon? We think this is a case of just waiting to see what happens, honestly.