Illinois-based gaming and esports company Midnight Gaming announced Monday that it entered into a letter of intent outlining the acquisition of certain assets of Canada-based TGS Esports. The letter of intent is similar to the non-binding term sheet Midnight Gaming signed in January 2023 with TGS Esports to acquire all of its outstanding assets. Should the deal go through, Midnight will acquire certain IP and assets of TGS in return for common shares in the company, and would also “assume certain liabilities” of the company.
The deal is being valued at roughly $18M USD, according to a release, and is still subject to the “satisfactory completion of due diligence,” approval by regulators, and shareholders. It should be noted that TGS Esports’ current market capitalization is less than a third of the proposed deal valuation. At the time of this writing, TGS Esports had a market capitalization of $7.67M CAD ($5.63M USD). Furthermore, the initial term sheet – which was signed on January 26, 2023, and was supposed to be closed by the end of June last year – included a $13.82M price tag for all issued and outstanding common shares of TGS. It is unclear why TGS’s price has increased by more than $4M in the meantime despite its stock having zero trading volume since February 2022, while the company also stopped filing with the Canadian Securities Administrators (CSA) at the end of 2023.
Under the terms of the deal, Midnight will retain some of the TGS staff, and will take ownership of some TGS IP such as its social media channels, website domains, and brands, as well as “various gaming and AV equipment such as PCs, peripherals, monitors, and more.” Midnight will also take over some “existing contracts currently signed with TGS,” according to the announcement.
TGS Esports describes itself as a “full-service marketing solutions provider that specializes in engaging video game and esports fans,” and in its heyday, it ran a number of business operations related to esports including The Gaming Stadium (from which its name is derived, a venue located in Richmond, British Columbia); esports and gaming competitions including Event Matchup Gaming, Mountainside Games, and Vancouver Street Battle; tournament platform Pepper; influencer management company Discover Management; and scholastic esports properties Volcanic and Collegiate Championship Series. The company also had a hand in running a number of live events over the years including Toronto Comicon, Fan Expo, Get On My Level, and Let’s Make Big Moves.
Midnight Gaming describes itself as an “esports media & entertainment company” and operates Gaming Television (GTV), a web-based gaming and esports-focused network that is also available on set-top box devices such as Apple TV, Roku, Amazon Fire, and smart TVs.