Allied Esports Entertainment offloads World Poker Tour in $78m deal
US firm starts asset stripping ahead of potential relaunch with a focus on real-money gaming
Allied Esports Entertainment has confirmed the sale of its poker-related business, including the World Poker Tour (WPT), for $78.25m to investment vehicle Element Partners.
Under the terms of the agreement, Element will acquire the WPT via a combination of upfront cash payments and a future revenue share earn-out.
Element will pay Allied Esports $68.25m initially, followed by a guaranteed revenue share of 5% of WPT tournament entry fees, up to a maximum of $10m.
The purchase agreement is expected to close in late January or early February, subject to shareholder and regulatory approvals.
Element currently holds investments across the electrical, fuel and flooring industries, with the acquisition of the WPT marking a first leisure investment for the firm.
The sale of the WPT is the first step in a move by Allied Esports to sell wider parts of its business ahead of a potential IPO as a new company.
Allied Esports confirmed that following the success of esports in 2020, the company’s board had agreed to “explore strategic options for the esports business, including a possible sale”.
The California-based firm said it had engaged with Lake Street Capital Markets to assist with the process, although no potential buyer had been identified.
Upon the completion of a potential sale of its esports asset, Allied Esports said it would: “proceed, under a new name, as a publicly traded holding company focused on using its cash resources to explore opportunities in online entertainment, including but not limited to, real money gaming and other gaming sectors”.
Frank Ng, Allied Esports CEO, said the timing of the sale of the WPT was based on future profitability timelines and the opportunity to use the raised capital to invest in the new venture.
Ng said: “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 and has made meaningful contributions for the company.
“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,” he added.
Adam Pliska, WPT CEO, said: “I want to thank Frank Ng and the entire management team for its support in allowing WPT to flourish during this period. My management team and I are excited about this next chapter and the tremendous new opportunities for the WPT brand and business.”
Founded in 2002, the first season of the World Poker Tour aired on the Travel Channel in the US the following year and is credited with being partly responsible for the poker boom.