Q1: The announcement was obviously very complex, can you explain the details of the transaction. How does this transaction value the company at $1.90?
Enthusiast Gaming announced a merger with Aquilini GameCO and Luminosity to form the largest publicly traded gaming and esports organization in the world. Together, we have a pro forma revenue of $22 million, $36 million in cash, and a total reach of 200 million across our media network. The combined enterprise valuation of Enthusiast Gaming, Luminosity and Aquilini GameCo is expected to be $250M.
The merger gives Enthusiast an implied value of $1.90 per common share of Enthusiast Gaming based on a 4.22 exchange ratio based on a concurrent $10 million bought deal financing at $0.45 cents.
The consolidated platform includes seven esports teams (including management of the Vancouver Titans Overwatch League franchise), 40 esports influencers, 80+ gaming media websites and 900+ YouTube and Twitch channels.
Q2: Why did Enthusiast partner with an esports organization? How are esports beneficial to Enthusiast?
Enthusiast’s successful monetization strategy and wealth of analytical data cover so many demographics within the wider gaming industry. This knowledge can be combined with Luminosity’s large cast of influencers and esports properties to create a robust gaming ecosystem of various communities targeting each corner of the gaming industry.
Our success in monetizing gaming properties will allow us to monetize Luminosity’s championship esports franchise through the same data-centric, ad tech approach to engage partnership and advertising opportunities.
Luminosity will have access to Enthusiast’s significant bank of valuable data and information on our demographic. Luminosity will be the first esports organization to use this data repository, which will enable them to monetize their platform more effectively than many other esports franchises. This will be a huge competitive advantage in the industry and positions the organization as one of leaders in the sector.
Q3: There are many esports players out there, so why did the merger with Luminosity and Aquilini GameCo make sense?
All three brands have an aligned strategy for growth, and have many beneficial synergies that will help achieve the continued growth trajectory moving forward.
Enthusiast has made 12 acquisitions in the last 18 months. We also have visibility into almost every deal through our industry leading position and our vast network of analytics. Many esports organizations follow the traditional sports franchise growth model, but Luminosity is different. Their growth is largely based on rich content and social influence from their esports teams, a strategy which we both agreed on from day one.
The brand power from the Aquilini’s, including the Vancouver Canucks, and Francesco Aquilini (incoming Chairman of the Board) coupled with Luminosity’s championship esports franchise, social influence, and innovative leadership team, spearheaded by Steve Maida, will be invaluable for the continued growth of the company.
Q4: What’s next?
Enthusiast has always had an aggressive growth strategy and we will continue to scale our business rapidly. We are building a gaming Ecosystem – a lifestyle company – for gamers, with a mission to be the largest gaming company in the world.
We have grown significantly since 2016, when we were a $3 million business, we quickly grew by 10X, and then grew to $47 million valuation, we went public at $1.25 and now we will an enterprise valuation of 250 million once the transaction closes. We want to continue growing, chasing a billion dollar valuation. This merger gets us one step closer to achieving our goal of being a billion dollar business.
We see blue sky potential for the growth of Enthusiast and the additional brand power, and funds will help us make strategic growth decisions and continue our consolidation within the sector. This gives us the $36 million war chest which we can deploy to continue realizing our dreams and our vision.