Activate Entertainment LLC is expected to bring consistent top-line revenue streams and profitability to New Wave Esports Corp. (CSE:NWES)
SmallCapPower | January 29, 2020: New Wave Esports Corp. (CSE:NWES) Tuesday announced that it has entered into a non-binding letter of intent for the acquisition of Activate Entertainment LLC, in an all-stock transaction that would be valued at US$1 million. If a definitive agreement is signed, the transaction is expected to close no later than March 31, 2020.
If this deal closes, chalk it up as a big win for New Wave Esports and its investors. Activate Entertainment is a creative management and production services company that provides high-quality esports livestreams and has operations in Los Angeles and Las Vegas.
Activate Entertainment LLC is currently working with a number of hotel chains, such as Caesars Entertainment and Marriott, to incorporate gaming programming, equipment and technology into rooms for a premium guest experience. In the case of Caesars Entertainment, Activate has worked with Caesars for the past two years on multiple esports initiatives including the esports stage at the World Series of Poker, the Streamer Suite at The Rio, and third-party esports events.
New Wave Esports asserts that during the past several years, Activate Entertainment has had consistent top-line revenue streams and profitability has been consistent with margins of approximately 25%. The Company expects the Transaction to create increased revenues and cash flow for Activate, benefitting from a partnership with esports and gaming industry companies to produce unique content programming out of the Blackfire Studio and DTLV locations. A New Wave Esports/Activate Entertainment combination is expected to create synergies including improved onsite event production, partnership and sponsorship management, and expanded event hosting and venue opportunities.
New Wave Esports is Ubika Research’s highest conviction idea in the growing esports space, as the research firm believes that NWES has the largest presence across the four main revenue verticals. New Wave is also focused on the console segment of the esports space. While the majority of esports are currently played on the PC, Ubika believes that there is some potential for console games. Fighting and sports games, such as Super-Smash Brother, Street Fighter, FIFA and NBA Live, have the potential to help consoles gain traction and currently New Wave is the only player looking at the console space.
New Wave Esports offers capital and advisory services primarily to esports teams and events. The Company recently acquired 100% of Even Matchup Gaming Inc., a Toronto-based esports and competitive gaming event organizer, broadcaster, and player management company that coordinates online and live tournaments. EMG hosts 80+ events per year and the audience continues to grow, with more than 7,400 attendees, 25.8M social impressions, 5.5M YouTube views, and 1.8M Twitch views.
New Wave Esports also has a $400,000 investment in Tiidal Gaming, operator of Lazarus, which is an esports team that has 50+ pro players and 12 teams in 12 countries. Lazarus operates in multiple platforms and has won a total prize pool of $4.7M with over 60+ podium finishes and 32+ tournament wins. Most of Lazarus’ winnings has been generated through Fortnite. New Wave Esports’ investment in Tiidal is currently up four fold due to revenue growth within Tiidal.
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