Esports Entertainment Group to offload Bethard for €9.5m as streamlining continues
Malta-headquartered firm sheds Swedish operator after less than two years of ownership as issues continue to mount
Esports Entertainment Group (EEG) has agreed to sell its Bethard subsidiary for a total consideration of €9.5m as the much-maligned firm continues to scale down its business.
EEG has agreed to offload the Malta and Sweden-licensed operator less than two years after purchasing the brand for €16m as part of its sustained period of M&A activity.
EEG has not disclosed which company it has entered into the purchase agreement with, but noted the deal is expected to close within a two-week period from 14 February.
The €9.5m deal will see the unnamed firm pay €1.65m in cash at closing, followed by an additional €6.5m of purchase consideration attributed to EEG’s release from payment of its contingent consideration liability.
The purchasing company will also assume liabilities of around €1.2m, with the terms of the sale allowing for a cash holdback of €150,000.
EEG said the sale of Bethard would allow the company to fully focus on its Lucky Dino online casino brands having also shuttered its Argyll Entertainment arm in December, which comprised RedZone and SportNation.
Alex Igelman, EEG CEO, said: “I am very pleased at the work that is being undertaken to reduce debt and focus on our core igaming and esports assets.
“We remain committed to building a world-class esports gambling operation that is global in reach and that provides esports content and strategic services to those involved in esports gambling, as well as those seeking to enter the market,” he added.
Along with signing the purchase agreement, EEG also signed an amendment and waiver agreement which will see proceeds from the sale of Bethard go to the holder of EEG’s senior convertible note.
Under the terms of the agreement, 50% of the proceeds from the sale of Bethard will go to the debt holder. Additionally, 50% of any proceeds from future asset sales or debt or equity offers would go to the debt holder, too.
EEG also confirmed the sale of its Spanish gambling licence, resulting in proceeds of €2.1m, of which 50% will be deposited with the debt holder.
The firm noted it had reduced its principal outstanding debt under the senior convertible note to $15.5m from the conversion of the senior convertible note into common stock.
EEG’s share price currently sits at $0.075 following a tumultuous period for the firm which has seen former CEO Grant Johnson relieved of his duties and subsequently launch a legal case against his former employer for unfair dismissal.