Mail.Ru The Group transferred an esports asset in the amount of $56 million to the licensor of Armored Warfare as part of a cashless deal
The loudest and strangest deal of recent times. Mail.Ru The Group has announced a partnership with a certain Modern Pick. The result of the partnership is the transfer of 51% of ESforce esports organization, which owns Mail.Ru Group. The nuance is that the transaction takes place without money, and Modern Pick itself is not a well—known and popular company.
Transaction Details
ESforce is evaluated today by the Mail.Ru Group of $110 million. Based on this amount, the asset passing into the hands of Modern Pick should be worth $ 56 million. The remaining 49% are still available Mail.Ru Group.
The official press release says that the transfer of the asset takes place as a contribution to Modern Pick. Vedomosti clarifies that the transaction is non-monetary: for ESforce, Modern Pick will provide mail with a part of its share.
Official data on the size of the share of Modern Pick that will fall into the hands of Mail.Ru Group, no. However, this can be calculated, because the cost of the combined company ESforce and Modern Pick is known — $ 350 million. We got 23%. Since u Mail.Ru If the group previously had 3% of Modern Pick, now its share in the company is 26%.
What’s wrong with the deal
Two points raise questions.
The first is related to the fact that Mail.Ru The Group acquired ESforce quite recently, in January 2018. Then the company noted that the esports organization “obviously fits into the strategy” of the corporation. As one of the market experts explained to us, “ESforce, first of all, had to give the infrastructure to the esports Warface.”
Now the Russian IT giant announces that it is going to build a “diversified esports business” together with Modern Pick. At the same time, it is claimed that the deal does not change the strategy Mail.Ru Group games and esports remain a key focus for the company.
The second point is the partner himself, Modern Pick. In the press release, he is positioned as a developer of AAA-class racing projects, which cooperates with ZDF and Red Bull, and is also a developer of Race World Online and FUNtasy Race games. But there is no information about the latest projects on the web, except on the Modern Pick website. The company seemed to have appeared out of nowhere.
What is the point
The light is shed by the fact that the licensor of the game “Project Armata”, the developer and publisher of which is officially listed Mail.Ru Group, is just a Modern Pick. Plus, its Russian office is registered in the same place as Mail.Ru Group.
In other words, it seems that the corporation actually transfers the ESforce asset to its other (affiliated) legal entity. If this is indeed the case, then we come to the next question: why.
It seems to us that the key point in the press release saying this is the following: “ESforce will be excluded from the consolidated financial statements Mail.ru Group”.
Some market participants consider ESforce to be a highly overvalued organization, despite its numerous assets (a number of esports teams, information resources, and even real arenas). If so, then Mail.ru Group, which is a public company, might want to hide it so as not to spoil the reporting.
Of course, this is nothing more than a version. The true motives may be different.
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