Swedish gaming group Modern Times Group MTG AB said late Monday that is selling esports company ESL Gaming to Savvy Gaming Group in an all-cash deal worth $1.05 billion.
Following the sale, MTG will focus fully on accelerating growth in its pure-play gaming business, it said.
MTG owns 91.46% of ESL Gaming so its stake corresponds to $960 million of the enterprise value and represents a total return on investment of 2.5 times, it said.
Net proceeds are expected to be around $875 million and the sale will be exempt from tax.
MTG said it intends to return at least 40% of the net proceeds to its shareholders, while the rest will be used to strengthen its position in the global gaming market and continued execution of its buy and build strategy.
Savvy Gaming Group is simultaneously acquiring Faceit, a platform for competitive multiplayer games, and will merge the two companies to create a global platform for competitive gaming called ESL Faceit Group.
The transaction is subject to regulatory approvals which will include antitrust and foreign investment screening, and is expected to close in the second quarter of 2022.
