Dubai-based Riva Technology and Entertainment (RTE), a subsidiary of MSM Corporation International Limited (MSM), and esports organization Galaxy Racer (GXR) have signed what they call an “implementation agreement.” This formal agreement outlines the steps to finalize their planned merger as part of which RTE will acquire all the remaining parts of GXR it doesn’t already own. The deal is expected to close by the end of August depending on several closing conditions being met.
The merged companies will be rebranded as “Celestial,” aiming to create a media and sports conglomerate (a large company made up of smaller businesses). Their primary initial focus will be the MENA region and the Indian subcontinent, according to a release.
RTE currently owns around 12% of GXR, but following completion of the merger, GXR will make up 75% of the total value of the merged RTE and MSM group. To achieve this, MSM will issue approximately three times its current number of shares to GXR’s shareholders.
Additionally, RTE and MSM are planning a “roll-up” as part of the deal. In this context, “roll-up” refers to Celestial (the merged RTE and GXR entity) acquiring all the parts of RTE’s existing businesses it doesn’t wholly own already. In association with this “roll-up,” the newly formed RTE group of companies will conduct a fundraising round. The proceeds from this fundraising will be used to support the merged company’s growth and development.
Earlier this month TEA reported that the ongoing merger process with RTE resulted in some issues at GXR’s operations in North America. In that report, GXR claimed that the group is “in the process of completing a very large corporate reorganization which, by its very nature, may change many aspects of our business. The changes include employee restructures and improvement of business strategies.”
The company also said at the time that it expected that the merger would be complete sometime in July, but Wednesday’s announcement has shifted that timeframe into August.