MTG increases ownership in ESL & writes down Zoomin.TV assets
- MTG increases ownership in ESL to 82.48%
- MTG writes down assets of Zoomin.TV
- Resulting in a net non-cash preliminary gain of SEK 7 million to be reported in Q3 results
MTG has increased its ownership in Turtle Entertainment GmbH (Turtle), the world’s largest esports company and operator of the well-known ESL brand, by 8.44% to 82.48% for a cash consideration of EUR 14.3 million (approximately SEK 152 million). MTG has acquired the shares from the founders and members of the management team.
Turtle operates leading tournaments such as ESL One and the Intel® Extreme Masters, and online leagues such as ESL Pro League. MTG acquired 74% of ESL in July 2015.
Jørgen Madsen Lindemann, MTG President & CEO: “ESL is a fast-growing sports megabrand and the preferred choice for esports viewers, players, partners and publishers around the world. We are delighted to increase our ownership and continue our successful partnership with the Turtle team.”
As part of the transaction, the previous 2019 put and call options have now been replaced with a put option for the minority owners to sell their remaining shares to MTG from July 2022. The sellers have also a right to receive an additional purchase price in the event that MTG divests the majority of its shares in Turtle at a higher valuation than the basis for this transaction. The remaining liability related to the option and the contingent consideration is valued at SEK 324 million based on the conditions in the agreement.
The transaction will result in a non-cash revaluation gain of SEK 176 million. The gain will be reported within items affecting comparability in MTG’s Q3 2018 results.
MTG will also report a non-cash cost related to Zoomin.TV of SEK 169 million within items affecting comparability in its Q3 2018 financial results. The cost arises from the write down of assets after a thorough review of the balance sheet following MTG’s acquisition of the remaining shares in the company in May 2018.
NOTES TO EDITORS
MTG (Modern Times Group MTG AB (publ.)) is a leading international digital entertainment group and we are shaping the future of entertainment by connecting consumers with the content that they love in as many ways as possible. Our brands span TV, radio and next generation entertainment experiences in esports, digital video content and online gaming. Born in Sweden, our shares are listed on Nasdaq Stockholm (‘MTGA’ and ‘MTGB’).
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