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Enthusiast to enter deal with TSR
Posted on Tuesday, 08 January 2019 15:40
Enthusiast Gaming is stepping into the virtual reality gaming market by acquiring the Sims Resource (TSR) in its largest acquisition to date.
The USD 20.00 million purchase will be funded through a combination of cash and stock and is due to complete on 15th February 2019, subject to the usual closing conditions and approval from the TSX Venture Exchange.
Enthusiast’s previously bought US-based Destructoid in June 2017 for an undisclosed sum in its largest deal prior to the announced acquisition of TSR.
Upon closing, the gaming company will pay USD 4.00 million in cash and USD 2.00 million in common shares, as well as a deferred payment of USD 14.00 million on the first anniversary of the completion of the purchase.
Through the deal, Enthusiast taps into what has been billed as the world’s largest female video content and community website.
Formed in 1999, TSR provides custom content gameplay based around the Sims franchise, a series of life simulation games that have sold over 200.00 million copies globally.
In 2018, the company posted CAD 7.00 million (USD 5.24 million) in revenue and earnings before interest, taxes, depreciation and amortisation of CAD 5.25 million, as well as a net income of CAD 4.50 million.
Menashe Kestenbaum, chief executive of the buyer, said: “The Sims Resource is one of the largest video game communities, ranking in the top five independent sites in total views in the US, Canada and the UK.
“It currently generates more than 10.0 per cent of the total views of Twitch.com, the largest video game website, which was acquired by Amazon in 2014 for approximately USD 1.00 billion.”
Kestenbaum added the deal was part of Enthusiast’s strategy to drive growth for its advertising through sales, via advertisers who are looking to promote a large female video game audience.
Established in 2014, the Canada-based buyer claims to be one of the fastest growing online community of video gamers, with over 80 owned affiliated websites that reach more than 75.00 million visitors per month.
For the nine months ended 30th September 2018, it posted revenue of CAD 7.38 million, a considerable increase on USD 1.01 million from the same period 12 months earlier.
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