OverActive Media Corp. (TSXV: OAM), headquartered in Toronto, has entered into a non-binding letter of intent to acquire Spanish esports entities KOI and Movistar Riders. In case of a successful closing, the all-share purchase price for KOI (Goatch S.L.) and Movistar Riders (Team Randomk Esports S.L.) will be up to $5.7M CAD ($4.27M USD) each based on Overactive Media’s closing share price of $0.19 ($0.14) on January 3, 2024.
The financial framework of this deal is built around an all-share compensation for KOI and Movistar Riders and a cash fee for KOI’s co-founders and public figures Spanish stramer Ibai Llanos and former Spanish soccer professional Gerard Piqué in exchange for ongoing services.
The proposed acquisition of KOI adds missing context to the organization’s “divorce” with Infinite Reality-owned esports holding ReKTGlobal in November. The strategic alliance between KOI and ReKTGlobal to use KOI’s brand for the esports team Rogue only lasted a year.
The deal, dated January 4, 2024, encompasses purchasing KOI’s esports operations, including their VALORANT Champions Tour EMEA League team, and all issued and outstanding shares of Movistar Riders. Following a successful consolidation, OverActive Media’s esports assets would include:
| League / Game | Team |
|---|---|
| Call of Duty League | Toronto Ultra |
| Overwatch Esports | Toronto Defiant |
| League of Legends EMEA Championship | MAD Lions KOI |
| League of Legends Women & Non-Binary | MAD Lions KOI |
| VALORANT Game Changers | MAD Lions KOI |
| VALORANT Champions Tour EMEA | Movistar KOI |
| Counter-Strike 2 | Movistar KOI |
| LVP Superliga | Movistar KOI |
| Pokemon | Movistar KOI |
| EA FC | Atlético de Madrid |
The all-shares consideration involves issuing up to 30M common shares of OverActive for each acquisition, totaling up to 60M shares. The initial payment is set to consist of 45M shares – currently worth $8.55M ($6.41M), that will be subject to a lock-up period*. The additional up to 15M shares are part of an earn-out agreement based on OverActive Media’s consolidated EMEA business achieving certain adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) targets during the period from January 1, 2024, to December 31, 2028.
Once the acquisitions are completed, Gerard Piqué and Gabriel Saenz de Buruaga, a seasoned media agency executive and co-founder of Movistar Riders, are set to join OverActive’s board.
As a result of OverActive Media’s agreement with KOI and Movistar Riders, trading for its common shares on the TSXV (TSX Venture Exchange) is currently halted.
* The lock-up period, during which the shares can’t be sold or traded, varies between the two acquisitions: 2.5 years for Movistar Riders and 5 years for KOI. However, during the lock-up period, 20% of the KOI shares will become available to trade each year on the anniversary of the deal closing. If the service agreements with Ibai Llanos or Gerard Piqué are ended for certain reasons before the lock-up period is over, any KOI shares that are still locked up will be canceled and won’t be worth anything. Additionally, some of the shares given for both acquisitions will be held aside in an escrow for three years to ensure that the sellers meet their obligations as agreed in the purchase agreements.