Gfinity (GFIN ) said it has acquired SiegeGG Corporation to become part of the Gfinity Digital Media group ("GDM"), the firm’s third significant transaction made in the past nine months.
The esports and gaming solutions provider explained that SiegeGG Corporation operates siege.gg, a website for statistics, analysis and news around the Rainbow Six Siege video game, popular first-person-shooter (FPS) game developed and published by Ubisoft.
Gfinity outlined that SiegeGG operates as ‘a leading authority’ for the Rainbow Six Siege competitive gaming community which has over 70 million registered users, with customers of its statistical information including e-sport tournament operators as well as Ubisoft itself.
Following the acquisition, Gfinity will own the underlying methodology and technology used to develop SiegeGG's statistical analysis, which it can extend across other game titles, it said.
Gfinity will also own the siege.gg website and access to the platform’s audience which currently delivers one million-page views per month and nearly 100,000 Twitter followers.
In return, SiegeGG will benefit from Gfinity's content and search engine optimisation (SEO) strategy and advertising performance optimisation techniques to drive user growth and advertising spend. Gfinity will also help to expand the breadth of coverage SiegeGG offers to enable the site to offer more enriching content outside of esports for Rainbow Six fans.
SiegeGG Corporation, the previous owners of SiegeGG, will be issued with 9 million new Gfinity shares in consideration for the Acquisition. The founders will also be entitled to an annual payment of 30% of revenues generated by SiegeGG, subject to appropriate caps, in the first two years following, payable in annual instalments at the end of each year.
For the year to 31 December 2020, SiegeGG reported unaudited revenues of $0.1m and pre-tax profit of c$0.04m. It had net assets on 31 December 2020 of $0.068m. It has already exceeded these revenue and profit figures in 2021 as it continues to grow. Gfinity believes this growth can be ‘significantly accelerated through inclusion in the GDM network.’
Today’s acquisition marks the third significant transaction made by Gfinity in the past nine months, following the acquisitions of Stock Informer in August and EpicStream in December.
Gfinity said these transactions are strengthening the performance of its fast growing GDM, to ‘improve its ability to offer broader and more in-depth content to its dedicated fans.’
CEO John Clarke said: "Gfinity's strategic focus is based on strengthening and growing 'what we own', in particular the Gfinity Digital Media group. We are excited to bring such a highly regarded website into the GDM and such a talented team led by Spencer into the Company.
“SiegeGG benefits from a highly engaged community of fans and industry-leading statistical analysis. Together with Gfinity's technology and engagement expertise, we look forward to taking the site to the next level and leveraging the technology across multiple game titles.
Clarke added that today’s transaction “once again highlights the ambition of the Directors to continue to drive profitable growth within the Group".
SiegeGG’s CEO, Spencer Glenn, said: "We're very excited to be joining Gfinity. We've worked hard to build this project on our own and achieved success in doing so, but the resources and expertise that we gain from the Gfinity team will be invaluable in accelerating the work we've already been doing, as well as opening new doors that we never thought possible."
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Back in June, Gfinity announced the launch of Only Mobile Gaming! (OMG!), a dedicated mobile gaming website and the latest addition to the Gfinity Digital Media group (GDM).
The website is expected to benefit from GDM's recent series of strategic advertising partnerships, including the expansion of its relationship with Venatus, aimed at promoting user numbers and monetising GDM's web platforms via on-site advertising and branded deals.
Gfinity said mobile gaming has proven ‘particularly resilient’ over the past year with revenue growing over 25% in 2020, the biggest increase across all gaming segments. It added that this area is expected to continue to be the fastest-growing segment over the coming years.
In addition, today’s proposed acquisition presents an opportunity for further expansion for Gfinity’s publishing platform GDM, which is a ‘key strategic pillar’ of growth for the group.
Gfinity’s recent 1H21 results highlighted the improved financial trading during the six-month period following the news that it had recorded its first ever quarterly positive adj EBITDA.
Reasons to GFIN
The esports industry represents an exciting investment opportunity for Gfinity which is the only established UK listed company in the esports sector. In 2018, global esports revenue grew by 38% in value, with a projected esports market value of $1.5 billion by 2020.
In November 2020, Gfinity launched a formal sales process as part of a strategic review which it said will help it continue its pathway towards profitability forecasted for 1Q21.
Gfinity has seen three major progressions with regards to joint ventures and partnerships, including partnerships with BT Sport, ViacomCBS and Abu Dhabi Motorsport Management.
The group said it is on track to deliver target revenues for this financial year of around £2m, leading the Company towards its maiden profit. GFIN is currently technically in an offer period post the announcement of its strategic review on 9 October 2020.
‘While the Company continues on its current pathway towards sustainable profitability, at this point in time it is important to all its stakeholders to ensure that it has explored all strategic options to capitalise on the potential market opportunity,’ GFIN noted.
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