Owned by Mail.Ru Group eSports holding ESforce sold a controlling stake in the German club SK Gaming to automotive concern Daimler. The deal will allow the holding to focus on its main asset — Virtus.pro
ESforce sold German SK Gaming to comply with the rules of the world eSports Association (WESA, which includes SK Gaming and the main asset of the holding — Russian eSports club Virtus.pro). WESA rules do not allow teams with the same shareholders and managers to participate in Championships.
Buyers of 67% shares of German SK Gaming were Daimler concern (produces Mercedes-Benz, Maybach, Smart, Fokker, etc.) and football club “Cologne”. The transaction amount is not disclosed.
The sale of SK Gaming will allow ESforce to “focus on the support, development and training in current and new disciplines,” the company noted, concluding that the deal “completes more than 20-year stage of Anton Cherepennikov’s relations with the eSports industry.”
Cherepennikov until recently was the main owner of ESforce. At the beginning of 2018, the Internet company Mail.Ru Group bought the holding from Cherepennikov and Highland Falls over the investment of 5.66 billion RUB and another RUB 1.13 billion Internet company has to pay in one year after the transaction, subject to the achievement of certain financial targets, stated in the materials of Mail.Ru Group. The owner of Highland Falls Investment was not disclosed, however, in the message of Mail.Ru Group said that a member of the Board of Directors of the company top Manager of USM Group Vladimir Streshinsky did not vote on this transaction to avoid a conflict of interest. USM Group Alisher Usmanov was considered one of the shareholders of ESforce after the Fall of 2015 investing in Virtus.pro about $100 million.
Daimler reports that the automobile concern has acquired an eSports club, seeking to expand its presence in professional eSports.
In 2017, Mercedes-Benz became a sponsor of several eSports tournaments, including Dota 2. And in August last year opened an eSports division, signing the composition of the players in the racing simulator F1 2018-Mercedes-AMG Petronas Esports team. The partnership between Daimler and SK Gaming will include branding team uniforms, joint media projects and technology exchange, the company said.
SK Gaming was founded in 1997. ESforse acquired 67% of the club’s shares in 2016 from investor Andreas Torstensson and ESL managing Director Ralph Reichart. The rest of the shares remained with the founder and Director of SK Gaming Alexander Muller.
Since then, the club won the ESL One Cologne in 2017, received a prize of $100 thousand In June 2018 team won the Moche XL Esports tournament with a $25 thousand. During its last CS: GO tournament, ESL One, the Belo Horizonte team finished third place, winning $17 thousand in total. As part of the SK Gaming CS: GO during the time of its existence in 2013 won the prize in the amount of approximately $3.5 million, while receiving gold medals 48 times. The club signed contracts with major sponsors, such as Deutsche Telekom, Mountain Dew and Visa. Now SK Gaming has signed rosters in the disciplines of Hearthstone, World of WarCraft, as well as League of Legends.
ESforce never disclosed how much they paid for a stake in the German team in 2016. Exit from the asset was profitable for the owner. Since the acquisition of a stake in SK Gaming, the volume of the eSports industry in the world has grown by more than 80% (from $493 million in 2016 to $900 million in 2018, according to NewZoo). The amount of the transaction can be in the range of $5-10 million.
Dmitry Rybalchenko, co-founder and marketing Director of the e-sports training service Lear2Play, believes that the deal is unlikely to bring any significant profit to ESforce. “Since the beginning of 2018, the organization has a clear vector for a positive economy and cost optimization. SK Gaming is a good club with a history, but now it is not at the peak (in comparison with 2016, when the holding acquired a share in the organization). The content of SK Gaming is a cost for ESforce. So the sale is one of the steps to improve the business”, — said Rybalchenko. He admitted that the asset could be sold “even at a certain discount” due to the introduction of WESA rules. “This obviously creates difficulties in the” breeding” of tournament teams and serves as another reason for the sale, ” Rybalchenko said.