Esports holding ESforce will become part of Mail.Ru Group
The ESforce esports holding is headed for a 100-percent integration into the framework of Russia’s largest technology company, Mail.Ru Group. This decision will not affect the company’s status or operating activities; ESforce will remain an autonomous holding within Mail.Ru Group which pledges to fulfill all its partner obligations and agreements in their entirety.
Mail.Ru Group acquires the business from Anton Cherepennikov and Highland Falls Investment. Cherepennikov keeps his Director and board of ESforce Holding Ltd. directors member positions.
Thanks to the synergy between complementary business areas, Mail.Ru Group will receive a complete environment and expertise in order to develop gaming and esports business areas, while ESforce will have an increase in audience indicators of the holding’s projects and extra growth areas to enlarge its total profits. A partnership of this kind is a great opportunity to reinforce ESforce’s leading positions in the Russian and CIS esports market, as well as expand its presence in the global esports arena.
Within last few years there have been significant investments in ESforce, which led to the holding’s brisk growth: at the moment the investment volume amounts to approximately 60M dollars, and this phase is almost over. In 2017 EBITDA was negative—approximately minus 15M dollars. The acquisition value totals 100M dollars deducting liability. There will be an additional payment at the end of 2018. Its amount will depend on KPI in certain financial and operating objectives. The anticipated payment sum amounts up to 20M dollars.
The expected revenue in 2017 totals 19M dollars, increasing by 150% compared to the previous year. Approximately 60% of revenue is evaluated in dollars and euro; roughly 80% of revenue is received from advertising and prize earnings. Apparel and accessories sales, event hosting and content creation make a contribution either.
As the major part of investments has been realized, and the business keeps growing, ESforce’s revenue is expected to increase by 80–100%, and losses will reduce by half. After that the company will start making profits by the end of the year.
"I perceive this transaction as the next step in ESforce’s development and consolidation in the world’s market. Esports has always been my passion, and I am happy that Russia’s largest Internet holding believes in the perspective of the business we have built within two years." — says Anton Cherepennikov, ESforce Holding director and co-owner.
"The world’s esports market is growing massively: according to some estimates, it is going to outrun the traditional sports market within the next decade. ESforce is one of the world’s leaders in all key areas. We are glad that this entire talented team who has built the business will stay in the company. Mail.Ru Group’s new acquisition obviously fits in the strategy. We are going to use our advantage on social media and in the gaming sphere to make ESforce’s success even more impressive. This acquisition perfectly fits in our strategy and has a lot of synergy with the existing business." — Boris Dobrodeev, General Director (Russia) at Mail.Ru Group, commented on the acquisition.
ESforce Holding is one of the world’s largest esports organizations, and the leader in electronic sports in Russia. The company integrates all key areas of the esports business, from organizing international tournaments and professional content creation to publishing and advertising activities, as well as online retail sales of esports-themed merchandise. ESforce owns 14 websites, 209 social media pages, and the casting, analyst and video production studio RuHub. Online broadcasts of the holding’s project attract more than 82M unique users annually. In 2017 the holding’s audience totaled 116M users; the number of sessions amounted to 440M; streaming platforms users watched over 120M hours of online broadcasts.