$150M merger

World Poker Tour to merge with Allied Esports

Allied Esports has generated considerable attention in the global esports entertainment landscape spanning North America, Europe and China.
Reading time 4:57 min
Black Ridge Acquisition and Ourgame International Holdings have entered an agreement that will see Black Ridge acquire two of Ourgame’s esports properties, Allied Esports and World Poker Tour.

Black Ridge Acquisition Corp, owned by WPT co-founder Lyle Berman, announced the purchase of both companies, saying he’ll merge them to form Allied Esports Entertainment (AESE).

Upon completion of the transaction, AESE will be an esports entertainment company dedicated to providing world-class in-person experiences, multiplatform content and interactive services to the global video gaming community through a unique fusion of two leaders in the esports and entertainment industries, Allied Esports™ and WPT®. By strategically combining Allied Esports’ global network of properties and content creation facilities with WPT’s nearly two decades of international expertise in live events, content distribution and customer engagement, AESE will provide esports audiences with offerings unparalleled in the industry today.

Lyle Berman, Director of Black Ridge, who is expected to be the Chairman of the Board of AESE upon closing of the transaction stated, “In more than 40 years in the gaming and entertainment business, this is the most exciting opportunity I have seen. The capital from the Black Ridge SPAC will be used to expand AESE’s global property network, accelerating their first-mover advantage as the company continues to build a brand that is synonymous with Esports.”

“This transaction will be transformational for our rapidly expanding company and provide the esports community with a fully capitalized, globally connected esports enterprise capable of producing the volume and breadth of esports entertainment products the industry is increasingly demanding,” said Frank Ng, who will step down as CEO of Ourgame to lead AESE under the same title. “By applying WPT’s proven business model to the much bigger, higher-growth global Esports business, we are creating an esports entertainment platform that is long-lasting and positioned to capture the esports monetization opportunity.”

Upon completion of the transaction, AESE is expected to be led by Lyle Berman, Chairman; Eric Yang, Vice Chairman; Frank Ng, Chief Executive Officer; Ken DeCubellis, Chief Financial Officer; David Moon, Chief Operating Officer; and Adam Pliska, President. This leadership group brings AESE a wealth of experience across gaming, entertainment and esports, with a proven track record of successfully operating high-growth public companies. Jud Hannigan will continue his role as CEO of Allied Esports and Pliska will continue to serve as president and CEO of WPT.

Allied Esports Entertainment Business Model Highlights

AESE will strategically combine the globally recognized Allied Esports brand with the proven three-pronged business model of the iconic World Poker Tour, featuring in-person experiences, multiplatform content and interactive services, to leverage the high-growth opportunities in the global esports industry with an addressable market of 2.2 billion people worldwide.

AESE will seek to amplify Allied Esports’ ongoing efforts in setting the standard in esports entertainment through the development of authentic in-person experiences from its iconic global property network, including flagship arenas, mobile esports trucks and affiliate arenas. Through those experiences, the company will look to continue to create original content that is shared with millions of viewers across partner distribution platforms, including digital, traditional and social media. Finally, AESE plans to scale its interactive services through the development of a proprietary online platform to deliver branded entertainment for participants and viewers globally.

Allied Esports has generated considerable attention in the global esports entertainment landscape spanning North America, Europe and China. In March, the company debuted its global flagship arena, HyperX Esports Arena Las Vegas, a state-of-the-art, dedicated esports venue and world-class production facility, where it has produced events and content across a variety of esports and entertainment genres. Allied Esports announced the industry’s first major naming rights partnership for a purpose-built dedicated esports arena with leading gaming product developer HyperX in November and was named Venue of the Year at the 2018 Tempest Awards, a part of the Esports Business Summit.

Allied Esports also recently announced the formation of the world’s first esports venue affiliate program – the Allied Esports Property Network – created for operators around the world interested in participating in Allied Esports’ global event programming, and licensing Allied Esports’ design, development and operations expertise for their own dedicated esports venues. The Allied Esports Property Network will provide members with access to Allied Esports’ global platform of events and content production, providing participants and viewers with integrated experiences in-person and online. Affiliate members will also be fully incorporated into Allied Esports’ global tournament ecosystem, offering teams and players the opportunity to participate in high-stakes events worldwide, culminating in live events held at Allied Esports’ flagship location, HyperX Esports Arena Las Vegas.

Following the success and popularity of its European esports truck “Big Betty,” in 2018 Allied Esports launched North America’s HyperX Esports Truck, a state-of-the-art, 80-foot, 18-wheel, 35-ton semi-trailer that transforms into a self-contained mobile stage and production studio, bringing esports competition directly to fans.

Allied Esports’ popular tournament brand, Esport Superstars, made its debut in China with the third annual edition of Esport Superstars: Hearthstone in December. The Esport Superstars: Hearthstone franchise totaled more than 16 million global viewers over the course of its first two events in Germany and the United States.

Through nearly two decades, WPT has successfully executed its three-pronged business strategy to monetize the game of poker. Today, WPT licenses its brand to approximately 65 poker events globally on an annual basis that are viewed by millions worldwide via an international distribution network including FOX Sports Network and numerous global online platforms. Currently producing its 17th season, the World Poker Tour is one of the longest-running television shows in U.S. history. In addition, WPT reaches millions of fans on a daily basis via its social media reach, its unique online membership site, ClubWPT, which offers inside access to the WPT, and a sweepstakes-based poker club available in 35 states across the U.S. In recent years, interactive services like ClubWPT have consistently contributed to a significant portion of WPT revenues.

After holding four Season 16 poker events at HyperX Esports Arena Las Vegas in 2018, including the legendary WPT Tournament of Champions final table, WPT announced that all televised final tables in Season 17 will take place at the Las Vegas venue.

Transaction Summary

Under terms of the definitive agreement for the transaction, at closing, in exchange for 100% of the equity in the entities comprising the Allied Esports business and WPT business, Black Ridge will issue approximately 11.6 million shares, with a value of $118 million, to Ourgame, as well as some of the management team members of Allied Esports and additional Ourgame-related investors. Black Ridge will also issue the Ourgame investor group warrants to purchase a total of 3.8 million shares of Black Ridge common stock at a price per share of $11.50. An additional $50 million of contingent stock consideration is available to Ourgame subject to certain milestones as set forth in the transaction documents.

The transaction reflects an anticipated initial enterprise value of approximately $213.8 million. Assuming no shareholder redemptions, the company will have $98.7 million in cash on the balance sheet after transaction costs and payment of $35 million for debt owed to Ourgame. The company will have zero debt at closing.

The transaction has been unanimously approved by the board of directors of Black Ridge and Ourgame, and is expected to close in the first quarter of 2019. The closing is subject to receipt of all requisite regulatory approvals, approval of Ourgame’s and Black Ridge’s stockholders, Black Ridge having at least $80 million of cash on hand remaining at the closing, and other customary conditions


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