Group transfers 51% of ESforce to Modern Pick with an valuation of $56m

19/07/2019 Group Limited (MRG), one of the biggest internet companies in the Russian-speaking world, has announced the creation of a partnership involving ESforce eSports business and Modern Pick.

The company says the partnership will allow Group and Modern Pick to create a well-diversified esports business, with a presence in Russia/CIS and Europe, access to a broader games portfolio, and expertise in AAA+ games development, esports teams, broadcasting, video production, streaming, tournament organisation and venues, combined with an extensive set of media and global brand partnerships.

MRG already holds 3% of Modern Pick, and will transfer 51% of ESforce to Modern Pick, and implied valuation of $56m ($100m for 100%), with the resulting combined company having an initial valuation of $350m.

The company will be re-evaluated based on its 2022 financial performance, and if it falls below a minimum threshold, MRG will have the option to exit the merged company and get its 51% of ESforce shares back.

According to a statement, MRG sees the move as a way to add options to its monetisation channels for both existing and future game content, and increase its role in the global esports market through operating esports leagues.

The company hopes to achieve significant synergies from access to a much broader European sponsorship market, wider opportunities in esports and media projects, and broadening its non-violent games portfolio, which it says is particularly attractive to sponsors.

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