Metaverse entertainment and production company Infinite Reality (iR) has reached an agreement to acquire esports conglomerate ReKTGlobal for $ 470m (~ £ 360m).
The merger integrates ReKTGlobal’s esports properties into iR, including its esports team franchises, marketing and partnership services, talent management, and technology products.
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The deal, which aims to boost Infinite Reality’s presence in the esports industry, will be fully settled in stocks, based on a $ 2bn (~ £ 1.53bn) equity valuation for Infinite Reality.
ReKTGlobal Founder and Chairman Amish Shah told Esports Insider that the acquisition is a positive for the esports industry. “Both companies are in a massive growth stage and this deal is accretive to both sides with the assets we are combining,” Shah said, adding that recent high-profile M&A activity in the sector proves that gaming is now mainstream.
In January 2022, it was reported by Bloomberg that ReKTGlobal was in talks to go public via the special purpose acquisition company (SPAC) Bull Horn Holdings Corp, but this was subsequently abandoned.
“We were getting tons of M&A activity from going solo, to [a] SPAC like Faze Clan, or even combining with other strategics and going public, ”Shah continued. “[But] we felt Infinite Reality has the right team, technology, traction and the metaverse sector was something we were looking at jumping into. ”
Alongside it’s B2B verticals, iR will acquire ReKTGlobal assets such as the esports organization and Spring 2022 League of Legends European Championship (LEC) playoffs runner-up Team RogueCall of Duty League team London Royal Ravensas well as its offices in New York, Los Angeles, Las Vegas, Charlotte, London, and Berlin.
Asked why the acquisition was coming from a metaverse company, Shah explained to Esports Insider that ReKTGlobal had been looking to do NFT and other Web3 initiatives for a while. “[iR] have a European strategy that you will hear more about in the coming weeks and fits perfectly with our London Royal Ravens and Rogue LEC franchises. ”
“I can’t comment on future plans but let’s just say that our fans are going to be real happy with what’s to come in the next few months. This is where the market is going and our next evolution for not just Rogue but all our assets at ReKTGlobal. ”
The acquisition by Infinite Reality is subject to approval from regulatory bodies and ReKTGlobal shareholders.
Infinite Reality CEO John Acunto said that resources and leaders would be combined between the two companies to accelerate Infinite Reality’s growth. ReKTGlobal had previously acquired marketing agency Greenlit Content, digital media agency Fearless Media, monetization platform FullCube, and career management company TalentX Entertainment, assets that it said were instrumental in capturing Infinite Reality’s interest.
“This acquisition is another step in our journey towards becoming the leading Metaverse Entertainment company in the world,” Acunto said. “The synergies across our combined business units, from content creation to Web3 entertainment to APIs and more, are awe-inspiring.”
RELATED: ReKTGlobal reportedly in talks to go public via SPAC merger
ReKTGlobal‘s Cofounder and CEO Dave Bialek also spoke on the deal, saying that the company “believes that the future of business, entertainment, socializing, and learning will be conducted in digital environments and that iR is the company that will bring it all to life.”
Regarding plans for after the merger, Bialek addressed specifically Infinite Reality’s entertainment pillar, Thunder Studios, which according to the CEO will be used in the process of digitalisation of the organization and of clients.
Investors of ReKTGlobal include the band Imagine Dragons, DJ Steve Aoki, and Utah Jazz NBA player Rudy Gobert.
This is not the only merger iR is currently involved in. It has reached an agreement with smoke alarms manufacturer Universal Security Instruments (USI), a merger that is under review by the company’s shareholders and by the US Securities and Exchange Commission as USI is listed on the New York Stock Exchange (NYSE). If the deal completes, it will trigger a Standby Equity Purchase Agreement with investment company Yorkville Advisors Global for up to $ 200m (~ £ 153m).
Esports Insider says: This deal is a huge move for the esports market and another big step for the metaverse to gain territory in this fertile industry. The acquisition of one of the leading esports conglomerates in the world makes it look like if you don’t go to the metaverse, the metaverse will eventually go to you. Even if some audiences show resistance to it, Web3 keeps consuming more and more spaces, not only in esports but also in other markets.
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