KOI brings top influencer Ibai Llanos and former professional soccer player and businessman Gerard Piqué, plus the VALORANT Champions Tour EMEA League team
Leading Spanish esports organization Movistar Riders adds key management and diversified business model
Gerard Piqué, co-founder of KOI, and Gabriel Saenz de Buruaga, prominent media agency executive and co-founder of Movistar Riders, will join the board of directors of OverActive
January 4, 2024 (TORONTO, ONTARIO) – OverActive Media Corp. (TSXV: OAM) (“OverActive” or the “Company”) announced today that it has signed a non-binding letter of intent (the “LOI”) dated January 4 January 2024 in a transaction with Goatch Global, SL (operating as “KOI”) and Team Randomk Esports SL, (operating as “Movistar Riders”) that establishes the terms of the Company's proposed acquisition of (i) assets used in connection with KOI's esports operations and (ii) all issued and outstanding shares of Movistar Riders in a transaction that will add capabilities and reach to OverActive's operations in EMEA (the "Acquisitions").
The Acquisitions mark a significant milestone for the Company, which is expected to be accretive to adjusted EBITDA in the future and add between $10 and $12 million in revenue in 2024. Additionally, OverActive believes the Acquisitions will increase its direct audience reach to more of 100 million people. throughout the Company's brand portfolio. The transaction is subject to approval by OverActive's board of directors and execution of the Definitive Agreements.
The assets to be acquired by the Company include all of KOI's esports assets and brands, including social media and intellectual property. In addition to acquiring these assets, OverActive will operate the VALORANT Champions Tour EMEA League space previously operated by KOI, as well as enter into service agreements with top global influencer Ibai Llanos and former professional footballer and businessman Gerard Piqué (the "Agreements of Services").
Ibai Llanos co-founded KOI and grew it to become one of the biggest brands in Europe while operating the third most followed channel on Twitch.
Gerard Piqué, FIFA World Cup winner, Euro champion and three-time UEFA Champions League winner, who played for teams such as FC Barcelona and Manchester United, founded the Kings League in 2022, a 7-a-side soccer league with 12 teams that started in Barcelona, Spain.
This new concept combines entertainment and sport, including amateur players, professionals and former stars. The Kings League is currently one of the most viewed sports channels in the world on digital platforms, with more than 100 million views in 2023 alone.
As a result of this agreement, OverActive, subject to the approval of Riot Games Inc. and the League of Legends EMEA Championship (“LEC”), will rename its esports teams operating as MAD Lions to MAD Lions KOI for the 2024 season. A global rebranding effort, including input from fans and influencers, will take place in 2024 to unite all teams globally under a single brand by the end of the year. The transaction also secures OverActive a spot in the VALORANT Champions Tour (“VCT”) EMEA League, subject to approval by Riot Games Inc. Once approved, the VCT team will be renamed Movistar KOI.
"Adding KOI and Movistar Riders to OverActive will solidify our position in Spain, EMEA and Latin America," said Adam Adamou, CEO of OverActive. “Both brands are actively involved in complementary esports titles, have industry-leading talent and social influence, world-class relationships and related services that generate strong synergies across our combined portfolio of assets. “We have spent a lot of time with Ibai, Gerard, Fer, Carlos, Gabriel and their respective teams, and we are all aligned in wanting to generate an immediate impact through this combination.”
“We are very excited about this new chapter for KOI joining forces with OverActive Media and Movistar Riders,” said Gerard Piqué, former professional soccer player and businessman. "We are convinced that they will bring the vision, enthusiasm and talent necessary to continue building the success story of the project we started in 2021, consolidating KOI's leadership position in the global esports industry."
Following the closing of the Acquisitions, Movistar Riders' esports teams will continue to serve the Spanish markets in League of Legends, Counter-Strike and FIFA, along with the company's marketing, production and influencer management operations, formed by Gaming House Media, Look! Broadcast and Talent Agency 2.10. Movistar Riders will continue to operate its FIFA team under the Atlético de Madrid brand. The leadership teams of OverActive and Movistar Riders intend to work together to optimize the integration of their respective assets, with Fernando Piquer joining OverActive as Chief Strategy Officer and Carlos García-Acevedo as Chief Commercial Officer (EMEA). Both will report to OverActive CEO Adam Adamou as members of the Executive Leadership Team.
"The way to remain relevant in the esports sector is to maintain growth to meet the needs of our audience," said Fernando Piquer, CEO of Movistar Riders. “We have been consistent in this area by creating new divisions within the company and now, by joining OverActive Media, we look to continue achieving new goals and milestones in the industry.”
Details of the transaction
The LOI sets forth the terms under which OverActive, Goatch and Movistar Riders agreed to proceed with the Acquisitions.
The consideration payable by OverActive for each of the Acquisitions will consist of up to 30 million common shares of the Company (“Common Shares”), of which 22.5 million Common Shares will be issued at closing (the “Initial Consideration Shares”). ”) and up to 7.5 half million common shares (the “earned shares”) will be issued subject to the EMEA-based OAM business achieving certain Adjusted EBITDA targets during the period from January 1, 2024 and December 31, 2028.
Accordingly, the aggregate consideration payable by OverActive to complete both Acquisitions is up to 60 million shares of common stock, consisting of 45 million Initial Consideration Shares and up to 15 million Earning Shares. OverActive will also pay Messrs. Llanos and Piqué a cash fee in exchange for their continued services under the Service Agreements.
Based on the closing price of the Common Shares on January 3, 2024 of $0.19, the value of each acquisition to date is up to $5.7M and the estimated value of each acquisition for purposes of TSXV Policy 5.3, based on Discount Market Common Share price of $0.1425 is up to $4,275,000.
All Initial Consideration Shares issued in connection with the acquisition of Movistar Riders and a portion of the Initial Consideration Shares issued in connection with the acquisition of KOI will be subject to a lock-up period of 30 months (in the case of Movistar Acquisition of additional clauses) or five years (in the case of the KOI acquisition) during which the holders of the Initial Consideration Shares will not be permitted to trade the shares without the prior consent of the Company, subject to certain customary and limited exceptions .
Additionally, in the case of the KOI acquisition, (i) 20% of the locked Initial Consideration Shares will be released from lock on each anniversary of the closing of the Acquisitions and (ii) if any of the Service Agreements are terminated by OverActive with good cause or by either of Messrs. Llanos or Piqué (other than for “good reason”) before the end of the lock-up period, all KOI Initial Consideration Shares that remain subject to lock-up will be canceled without consideration.
A portion of the Initial Consideration Shares will also be held in escrow for three years following the completion of the Acquisitions to secure the indemnification obligations of suppliers under the terms of the definitive purchase agreements with respect to the Acquisitions.
Each Acquisition will be subject to a number of conditions, including the negotiation and execution of a definitive purchase agreement, the simultaneous completion of the other Acquisition, the receipt of all necessary approvals from the TSXV, the board of directors and third parties (including, in the case of the KOI Acquisition, the approval of Riot Games for the transfer of the KOI VCT Team Participation Agreement), OverActive entering into new contracts with the players and coaches of the KOI esports team and other customary conditions that are will be established in the definitive purchase agreement. Assuming the issuance of all Earn Out Shares, after giving effect to the completion of the transaction, the Company will have approximately 140 million Common Shares outstanding, 30 million of which will be owned by the former owners of Movistar Riders and 30 million be owned by KOI or its shareholders. The transaction is an arm's length transaction and will not result in the creation of a new “Control Person” as defined in the policies of the TSXV.
Once the Acquisitions are closed, Gabriel Saenz de Buruaga, co-founder of Movistar Riders, and Gerard Piqué are expected to join the Company's board of directors. Mr. Sáenz de Buruaga is a serial entrepreneur with a career dedicated to technology, media and advertising, and telecommunications. He is a founding member of the ISDI (Higher Institute for Internet Development), a member of the boards of directors of several companies and an active investor in the Internet ecosystem. Their combined experience in esports, sports and popular culture is invaluable to the OverActive Board and our combined shareholders.
“I am absolutely thrilled to have the opportunity to join what I consider to be the most ambitious digital project on the current scene. It is a privilege to be able to work side by side with professionals of the caliber of OverActive Media and KOI, whose reputation and experience in the industry are indisputable,” said Gabriel Sáenz de Buruaga, Co-Founder of Movistar Riders. “I firmly believe in the vision and objectives of this project and I look forward to doing my part to help it reach new heights. I am convinced that we can make a significant difference in the digital world."
"Sáenz de Buruaga and Piqué are leading voices of influence in their respective industries,” said Sheldon Pollack, president of OverActive Media. “We are excited about the opportunities these acquisitions provide for OverActive. They will allow us to expand our operations internationally and strengthen our position in electronic sports worldwide.”
The proposed acquisitions kick off the new year, building on the company's transformative period throughout 2023. OverActive's evolution is based on its strategic mission to establish teams, communities and experiences that engage, resonate and inspire generations of fans. In doing so, the Company continues to provide meaningful ways for partners to interact and connect with the broader esports community. The combination, along with a global rebrand under a unified name, will create one of the biggest powerhouses in the esports landscape.
ABOUT OVERACTIVE MEDIA
OverActive Media Corp. (TSXV: OAM) is headquartered in Toronto, Ontario, with operations in Madrid, Spain and Berlin, Germany. OverActive's mandate is to build an integrated global company offering sports, multimedia and entertainment products for today's generation of fans with a focus on esports, video games, content creation and distribution, culture and live and online events. OverActive owns team franchises in professional esports leagues, including (i) the Call of Duty League, doing business as Toronto Ultra, and (ii) the League of Legends EMEA Championship, doing business as MAD Lions. OverActive also leads OAM Live, an events division that produces both live and online events.
ABOUT KOI
KOI is the Barcelona-based Esports club founded by Kosmos and Ibai Llanos in December 2021. The club currently has three teams: League of Legends, which competes in the LVP Superliga; VALORANT, which after a season competing in Spain, now competes in the VALORANT Champions Tour EMEA League; and FIFA.
ABOUT MOVISTAR RIDERS
Movistar Riders is one of the leading eSports clubs in Spain. Its professional players represent the Movistar Riders brand in multiple national and international tournaments, competing in the most popular games such as League of Legends, CS2 or VALORANT; in addition to having the Atlético de Madrid - Movistar team for FIFA.
The club is based at the Movistar eSports Center, in Matadero Madrid, a high-performance center where both players and coaching staff have the most advanced means to carry out their activity at the highest level.
For more information visit the club's official website: https://www.movistarriders.gg/
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release. TSXV: OAM Shares will remain suspended pending receipt and review of acceptable documentation with respect to the Fundamental Acquisition in accordance with Section 5.6(d) of Foreign Exchange Policy 5.3.
Source: Territorioblockchain.com
