Swedes cash out of e-sports for princely sum

Modern Times MTG AB

25/01/2022 11:41

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are their own.)
    LONDON, Jan 25 (Reuters Breakingviews) - Modern Times
 MTGb.ST  is turning off its e-sports monitor. The
Stockholm-listed company announced late https://nam02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.mtg.com%2Fpressroom%2Farticle%2F%3Fa%3Dmtg-divests-esl-gaming-to-savvy-gaming-group-for-usd-1-050-million-to-combine-with-faceit-and-create%26i%3D2DA265761E3146E6&data=04%7C01%7Ckaren.kwok%40thomsonreuters.com%7Ca7d0d1d6359d46c90e7608d9dff55567%7C62ccb8646a1a4b5d8e1c397dec1a8258%7C0%7C0%7C637787067061309375%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000&sdata=gLH8BfTU2aUPdC49EoDO9fkxJ9q5NLi4sqUPSB6RV4s%3D&reserved=0
 on Monday it was selling ESL Gaming, which organises and
commercialises competitive video game tournaments, for $1
billion in cash to Savvy Gaming. Given MTG is quitting a growth
area, the 37% pop in its share price reflects that it’s getting
a rich price.
    ESL’s turnover was around 1.3 billion Swedish crowns ($148
million) in the 12 months to September, putting the deal at 7
times sales. Canadian peer Enthusiast Gaming  EGLX.TO  trades at
less than 3 times 2021 sales, according to Refinitiv data.
Savvy’s plan to merge ESL with FACEIT, another e-sports outfit,
may make up some of the difference. 
    The deal also marks another foray into gaming for Saudi
Arabia’s $450 billion Public Investment Fund, which owns Savvy.
The PIF last year raised its stakes in U.S. gaming companies
Electronic Arts  EA.O  and Activision Blizzard  ATVI.O 
 urn:newsml:reuters.com:*:nL5N2N424M, which is being sold to Microsoft  MSFT.O  for $69
billion  urn:newsml:reuters.com:*:nL4N2TY3FM. While MTG can refocus on other areas of
gaming, Saudi’s need to identify post-oil money-spinners is more
pressing. (By Oliver Taslic)
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 (Editing by George Hay and Karen Kwok)
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