Business
ESE Entertainment CEO Shares Insights on LOI for Sale of Digital Motorsports and Frenzy for Consideration Valued at $41M CAD
VANCOUVER, BC / ACCESSWIRE / March 30, 2023 / ESE Entertainment Inc. (TSXV:ESE) (OTCQX:ENTEF) ("...
About this update from Ese Entertainment Inc
[{"type":"text","content":"ESE Entertainment CEO Shares Insights on LOI for Sale of Digital Motorsports and Frenzy for Consideration Valued at $41M CADVANCOUVER, BC / ACCESSWIRE / March 30, 2023 / ESE Entertainment Inc. (TSXV:ESE) (OTCQX:ENTEF) (\"ESE\" or the \"Company\"), a leading gaming technology company, is pleased to provide an update regarding the previously announced Letter of Intent (\"LOI\") for the sale of its wholly owned subsidiaries, Digital Motorsports (\"DMS\") and Frenzy, for consideration valued at CAD$41 million (the \"Transaction\"). ESE's management team and Board of Directors have been working diligently to unlock the true value of the Company's assets and believe that the Transaction will be a significant step towards that goal.Konrad Wasiela, CEO of ESE, commented, \"The Frenzy and DMS businesses collectively represent approximately 17% of ESE's total business by sales. [1] While these businesses have contributed to the overall growth of the Company, management and the Board of Directors believe that they have not been adequately valued. By carving out these assets, ESE is taking the first step to better highlight the value of its core intellectual property and technology, GameAddik. Our business has been growing rapidly, and we are strategically shifting towards focus on our technology and data-driven business.The sale of DMS and Frenzy is expected to increase the book value of ESE, enhance cash reserves and liquidity, and improve the Company's balance sheet. As ESE focuses on its core technology and data operations, the divestiture will enable the company to improve margins and work towards profitability, ultimately benefiting ESE shareholders.\"The LOI contemplates that the Transaction will be completed by way of an amalgamation, merger, or other business combination among the purchaser, DMS, and Frenzy. The issuer resulting from the Transaction (the \"Resulting Issuer\") is expected to trade on the NASDAQ and continue the operation of DMS and Frenzy's existing businesses. The consideration for the acquisition of DMS and Frenzy is anticipated to be paid in common shares of the Resulting Issuer, valued at CAD$41 million. ESE would further 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 Clos...