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Entain has agreed terms to its latest M&A agreement, purchasing Tidal Holdings’ Sportsflare subsidiary, an esports betting development company.
A CSE-listed enterprise, Tidal will sell all issued and outstanding shares in Sportsflare – the operating name of its Tidal Gaming NZ holding – to Entain for a total consideration of $13.25m.
However, the duo have asserted that the transaction has been negotiated ‘at arm’s length’, and is still subject to several conditions, such as Tidal shareholder approval and receipt of all required consents.
Thomas Hearne, Tidal CEO, said: “I am incredibly proud of what the Sportsflare team has done over the last year. Given the capital markets environment, we believed it was best to find a great home for Sportsflare in order to maximise value for Tidal shareholders.
“Sportsflare will be a great fit with Entain’s strong presence in the industry and our board of directors is confident that Sportsflare joining Entain is the best long-term solution for its employees and partners.”
Tidal expects to hold a meeting of its shareholders on 26 April 2023, although this has not been fully confirmed, where directors, officers and shareholders with 39.29% or more of issued and outstanding shares will vote on the transaction.
The group’s Board of DIrectors has approved the purchase agreement and unanimously recommended to its shareholders that the company become part of Entain’s portfolio, joining some 30 other B2C and B2B betting and gaming brands.
Should Tidal terminate the transaction, it will have to pay a £500,000 fee to Entain, although the firm can retain the £13.25m purchase price for 180 days post-close.
The group can access the funds to satisfy working capital adjustments or claims brought by Entain as well as up to 20% of the settlement to pay ‘’reasonable’ transaction-related costs.
As a Toronto-headquartered business, Tidal’s integration into Entain – should its shareholders approve such a move – marks both an expansion of the FTSE100 gambling group’s North American visibility and presence in esports betting.
So far, the defining brand in Entain’s North American business portfolio and strategy has been BetMGM, its online sportsbook joint venture operated in cooperation with long-term US player MGM Resorts.
However, the group stepped up its efforts in 2021 with the acquisition of esports platform Unikrn, which was subsequently relaunched in Canada and Brazil – in the case of the latter, Entain has kept its ambition to become a market leader post-regulation no secret.
Sportsflare has itself built up a strong standing in international esports betting in recent years, partnering with the likes of Bayes Esports and developing bet types such as its Flash Markets live in-game wagering product.
In connection with the transaction, Tidal has come to a loan agreement with one of Entain’s affiliate brands, Ladbrokes Group Finance plc.
Sportsflare will borrow NZD$1,658,470, with an advance payment of NSD$1,158,470 (€673,130) made on 2 February and two further advances of NSD$250,000 (€145,278) due in March and April 2023 should the transaction still be on track for completion.
