Premier esports entertainment company Allied Esports has announced that they have sold off the World Poker Tour (WPT) to investment firm Element Partners.
The deal entails Element buying off Allied Esports' poker-related business and assets for an astounding amount of US$78.25 million. The company has also announced that it intends to "explore strategic options" for its esports business.
According to the terms of the acquisition, Element shall be paying $68.25 million upfront either in January or February. The remaining $10 million shall be received through a 5% guaranteed revenue share of WPT-branded tournament entry fees on Element-owned or licensed gaming platforms, payable over three years after closing.
CEO of Allied Esports Entertainment Frank Ng said, "Due to COVID-19's impact on the company's overall revenue generation and profitability timeline, we believe the forthcoming sale of the WPT business will garner significant capital and an avenue to determine new opportunities that will deliver accelerated returns for our stakeholders."
"Despite the many challenges caused by the COVID-19 pandemic, the WPT business has delivered substantial, impactful results, specifically through its online platforms and services. Allied Esports, with its world-renowned HyperX Esports Arena Las Vegas and best-in-class production services, has generated market attention as the esports industry gained momentum during the pandemic."
CEO of WPT Adam Pliska said in a short video on Twitter, "We think this deal will allow the World Poker Tour to do a number of things that it always wanted to do. For myself and my management team, we're still here and it's business as usual. We look forward to this exciting opportunity and the next chapter of the World Poker Tour. We look forward to continuing to bring the best in poker around the world."
Meanwhile on the company's sale of its esports business, Allied Esports has sought Lake Street Capital Markets to help with the process. For now, there have been no "initial or ongoing" negotiations.
If the sale of its esports business pushes through, Allied Esports would move on, using a new name as a publicly traded company. Ultimately, Allied Esports intends to then use cash resources "to explore opportunities in online entertainment", such as real-money gaming among other sectors.
WPT has been one of the world's leading poker brands. It helped spark the worldwide poker boom of the early 2000s through its late night tournament broadcasts featuring insightful commentary from Mike Sexton and Vince Van Patten.
An internationally televised gaming and entertainment brand, WPT was started in 2002 in the US. In 2009, PartyGaming acquired WPT for $12.3 million. In 2015, Ourgame International Holdings bought the company for $35 million in cash.