ESE Announces Letter of Intent for Accretive Sale of Digital Motorsports and Frenzy for $41M CAD

Rhea-AI Summary

ESE Entertainment Inc. (TSXV:ESE)(OTCQX:ENTEF) has announced a non-binding letter of intent (LOI) dated March 28, 2023, for the acquisition of its subsidiaries, Digital Motorsports and Frenzy, by a U.S. SPAC in a transaction valued at CAD $41 million. The SPAC has over CAD $130 million in cash available. The transaction aims for an amalgamation or merger, subject to satisfactory due diligence and regulatory approvals, including from TSX Venture Exchange and NASDAQ. Completion is uncertain, and no finder’s fees are involved. Further information will follow upon entering a binding agreement.

Positive

• Transaction valued at CAD $41 million, indicating potential growth.
• SPAC involved has over CAD $130 million in cash, strengthening transaction feasibility.

Negative

• Completion of the transaction is uncertain and requires various regulatory approvals.
• No assurance that a binding agreement will be finalized.

VANCOUVER, BC / ACCESSWIRE / March 29, 2023 / ESE Entertainment Inc. (TSXV:ESE)(OTCQX:ENTEF) ("ESE" or the "Company"), a gaming and esports company that provides a range of services to leading video game developers and publishers, is pleased to announce that it has entered into a non-binding letter of intent (the "LOI"), dated March 28, 2023, with a U.S. special purpose acquisition company (SPAC) (the "Purchaser") and a gaming media company ("GamingMediaCo") with key operations in Latin America, contemplating the acquisition (the "Transaction") of ESE's wholly-owned subsidiaries, Auto Simulation Limited dba Digital Motorsports ("DMS") and Frenzy sp. z.o.o. ("Frenzy") alongside Purchaser's acquisition of GamingMediaCo. The Purchaser is a NASDAQ listed company with over CAD $130 million in cash and cash equivalents in its treasury and in trust as of its most recent filings.

The LOI contemplates the Transaction being completed by way of an amalgamation, merger, or other business combination among the Purchaser, ESE, GamingMediaCo, DMS and Frenzy, although the final structure of the Transaction has not yet been finalized and remains subject to the receipt of structuring advice by the parties. The issuer resulting from the Transaction (the "Resulting Issuer") is expected to trade on the NASDAQ and will continue the operation of the existing businesses of DMS and Frenzy. The consideration for the acquisition of DMS and Frenzy is currently anticipated to be paid in common shares of the Resulting Issuer valued at CAD$41 million. Further, ESE would be entitled to additional common shares of the Resulting Issuer upon the Resulting Issuer achieving certain milestones related to the Resulting Issuer's share performance on the NASDAQ.

The completion of the Transaction remains subject to a number of conditions including satisfactory due diligence, the receipt of structuring advice by the parties, approval of the board of directors of each of the parties, entry into a binding agreement, the receipt of all necessary regulatory approvals, including approval of the TSX Venture Exchange and the NASDAQ, and other conditions customary to transactions of this nature. The Transaction is at arm's length and, as currently contemplated, no finder's fees will be paid thereon. There can be no assurance that the Transaction will be completed as proposed or at all.

Further updates and particulars of the Transaction will be provided upon the Company and the Purchaser entering into a binding agreement for the Transaction.

ESE Entertainment Inc.

Konrad Wasiela
Chief Executive Officer and Director
+1 (437) 826-4012

About ESE Entertainment Inc.

ESE is a global technology company focused on gaming and esports. The Company provides a range of services to leading video game developers, publishers, and brands by providing technology, infrastructure, and fan engagement services internationally. ESE also operates its own ecommerce channels, esports teams, and gaming leagues. |www.esegaming.com

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

This news release contains certain statements that may constitute forward-looking information under applicable securities laws. All statements, other than those of historical fact, which address activities, events, outcomes, results, developments, performance or achievements that ESE anticipates or expects may or will occur in the future (in whole or in part) should be considered forward-looking information. Such information may involve, but is not limited to, statements with respect to: the Transaction and the anticipated terms thereof; the execution of a definitive agreement for the Transaction; the business of the Resulting Issuer and its listing on the NASDAQ; the consideration paid under the Transaction; and the conditions of closing the Transaction. Often, but not always, forward-looking information can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or statements formed in the future tense or indicating that certain actions, events or results "may", "could", "would", "might" or "will" (or other variations of the forgoing) be taken, occur, be achieved, or come to pass. Forward-looking information is based on currently available competitive, financial, and economic data and operating plans, strategies or beliefs as of the date of this news release, but involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements of ESE to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information, including that a binding agreement may not be entered into with respect to the Transaction, and that even if a binding agreement is entered into that the Transaction may not be completed. Such factors may be based on information currently available to ESE, including information obtained from third-party industry analysts and other third-party sources, and are based on management's current expectations or beliefs regarding future growth, results of operations, future capital (including the amount, nature and sources of funding thereof) and expenditures. Any and all forward-looking information contained in this press release is expressly qualified by this cautionary statement. Trading in the securities of ESE should be considered highly speculative.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For further information about ESE, please contact:

Daniel Mogil, Investor Relations
investors@esegaming.com
+1 (437) 826-4012

SOURCE: ESE Entertainment Inc.

View source version on accesswire.com:
https://www.accesswire.com/746528/ESE-Announces-Letter-of-Intent-for-Accretive-Sale-of-Digital-Motorsports-and-Frenzy-for-41M-CAD

FAQ

What is the recent acquisition announcement by ESE Entertainment (ENTEF)?

ESE Entertainment announced a non-binding letter of intent for the acquisition of its subsidiaries by a U.S. SPAC in a transaction valued at CAD $41 million.

When was the LOI for ESE Entertainment's acquisition signed?

The letter of intent (LOI) was signed on March 28, 2023.

What is the estimated value of the transaction involving ESE Entertainment (ENTEF)?

The transaction is valued at CAD $41 million.

What company is acquiring ESE's subsidiaries?

A U.S. special purpose acquisition company (SPAC) is acquiring ESE's subsidiaries.

What approvals are needed for the transaction by ESE Entertainment (ENTEF)?

The transaction requires regulatory approvals from TSX Venture Exchange and NASDAQ, among other conditions.