Entertainment and technology company ESE Entertainment Inc. (ESE) announced that it has signed a Letter of Intent (LOI) to acquire Irish esports infrastructure company Auto Simulation Ltd—the parent company of Digital Motorsports.
ESE will acquire 100 per cent of the issued and outstanding securities in the capital of Digital Motorsports. The purchase price is still being determined, but it will be paid with a portion in cash and the balance in common shares of ESE at a deemed price of $1.48 (~£1.05) per share. These shares will be released over three years from issuance.
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The LOI provides that Niall Maher, founder and CEO of Digital Motorsports, as well as its staff, will continue to operate Digital Motorsports’ business following the acquisition.
Digital Motorsports is an award-winning simulation racing company that has grown its revenue year over year (YoY). It offers infrastructure, technology, and support for the esports ecosystem globally and is best known for its sim racing solutions.
Konrad Wasiela, CEO of ESE, commented: “We are excited to announce the anticipated expansion of our business with the proposed acquisition of Digital Motorsports. Our shared vision of becoming the number one global brand for esports in the motorsports industry was paramount in coming together to sign the LOI. We are excited to work closely with Digital Motorsports to build on their existing business, focusing on increasing revenue and profit margins.
“Niall and his team at Digital Motorsports have been able to prove a profitable business model, with contracts with tier-1 customers across the globe, and they are just getting started,” he continued. “The digital motorsport sector continues to grow around the world, and we are thrilled to have the opportunity to become a key part of that growth.”
ESE will acquire Digital Motorsports’ portfolio of intellectual property related to racing simulator solutions, components, and cloud-based racing services, including products and technology currently in development.
Digital Motorsports has already signed contracts with Motorsport Ireland to host all of the national esports events, contributing to the possibility of representing Ireland at the official FIA Digital Motorsport Games and the Virtual Olympics.
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Niall Maher, CEO of Digital Motorsports, added: “We are excited to have agreed on this letter of intent to become part of the ESE family. We believe in Konrad and his team’s ambition to grow ESE into a billion-dollar-plus company. The visions of the two companies are aligned to take the top spot on the podium. We are really looking forward to leveraging the ESE infrastructure, technology and expertise to create something truly special. This will only benefit our customers and the wider sim racing community.”
ESE recently acquired K1CK Esports Club and entered into a share purchase agreement with World Phoning Group Inc., Encore Telecom Inc., and their two subsidiaries collectively known as WPG.
As always, ESE notes that the acquisition remains subject to, among other things, ‘satisfactory completion of ESE’s due diligence, the parties entering into a definitive agreement and TSX Venture Exchange approval.’
Esports Insider says: ESE’s rapid growth is a testament to its ability to foresee needs before they arise. ESE doesn’t appear to be simply gobbling up companies but expanding them to lift the esports ecosystem as a whole, which is nice to see. In uncertain times post-COVID, it will important to have your ‘esports eggs’ in multiple baskets.