Gfinity buys American esports tech firm CEVO

Esports company Gfinity acquired the entire issued share capital of American-based global provider of esports technology services CEVO, it announced on Monday, for total consideration of up to $2.7m payable in cash and shares.

The AIM-traded firm said CEVO's technology, including its tournament management system, anti-cheat system and dynamic broadcast software, would strengthen Gfinity's position as a leading provider of end-to-end esports solutions.

It also claimed the acquisition would accelerate Gfinity's overseas expansion into North America, helping Gfinity deliver on its strategy of building a leading global esports business, with the CEVO management team strengthening Gfinity's capability to take advantage of the wide range of opportunities in the fast growing esports sector.

“We are delighted to have acquired one of the most reputable esports technology players in the in the industry, which further strengthens our position as a market leader in esports technology,” said Gfinity chief executive Neville Upton.

“It also demonstrates our determination to become a leading global player in the industry having previously delivered events in the UK, France, Mexico and [the] US since the start of this year.”

Gfinity said the consideration would be satisfied through the immediate payment of $977,200 in cash and the issue of 3,614,049 ordinary shares of 0.1p each in Gfinity, at a price of 19.63p per ordinary share, being the average closing mid-market share price during June 2017, to the vendors.

The agreement also involved deferred cash consideration of up to $418,800 in cash and the issue of up to 1,548,877 ordinary shares at a price of 19.63p per ordinary share, subject to achieving revenue targets for 2017.

“CEVO's combined experience of 50 years in the market supplements our existing team of talented individuals - creating one of the most experienced esports operators in the industry - leaving us well positioned to take advantage of a growing number of esports opportunities in future,” Upton added.

Gfinity said it would also grant options over 2,079,052 ordinary shares to current CEVO staff as part of the transaction.

It said the options would be exercisable at 19.63p per share after a year from the completion date of the transaction until 30 August 2027, with 30% being subject to the deferred cash and share consideration targets having been achieved.

“We are very excited to join Gfinity, with whom we have enjoyed a strong relationship with for several years,” said CEVO chief executive Eric Ping.

“This is a great opportunity to create a truly world-class global esports business.

“Our combined technical capability allows us to provide a truly valuable suite of esports products and solutions which we look forward to presenting to our partners.”