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GameSquare Esports buys US esports club backed by Dallas Cowboys owner Jerry Jones in $33M all-stock deal

The Jones family and fellow Complexity shareholder Goff Capital invested $8.5 million more into GameSquare through a bought-deal financing

GameSquare Esports Inc. -
Based in Texas, Complexity fields esports teams that have won lifetime winnings of US$4.7 million

GameSquare Esports Inc (CSE:GSQ) (FRA:29Q1) has acquired NextGen Tech LLC (doing business as Complexity Gaming) - a major esports organization with Dallas Cowboys owner Jerry Jones as a shareholder - in a $33 million deal. 

GameSquare issued around 83.3 million common shares of stock to former shareholders of Complexity, including the Jones family, Goff Capital Inc and Complexity CEO Jason Lake. Combined, the parties will own 47% of the combined company.

"Complexity Gaming, led by Jason Lake, is an outstanding organization in the esports industry," GameSquare CEO Justin Kenna said. "They are a powerhouse combination of winning teams, world-class facilities, and professional management, and the value of the relationships with the Dallas Cowboys, the Jones family, and the Goff family cannot be understated.

“In my view, Complexity has built a tremendous foundation that is perfectly positioned for its next phase of growth and profitability. We see huge potential to monetize the incredible content that Complexity creates every year and numerous opportunities to create merchandise that allow fans to show their loyalty to one of America's greatest esports teams."

READ: GameSquare Esports says Gaming Community Network in alliance with Black Fire Innovation to drive new industry initiatives

The Jones and Goff families decided to further increase their skin in the game, agreeing to invest $8.5 million into GameSquare as part of a non-brokered private placement at a subscription price of $0.40 per unit. The offering is expected to close on July 22.

Additionally, GameSquare has entered into a multi-year esports and gaming partnership to become the agency of record for Jones’ Cowboys, meaning GamesSuare can buy advertising on the team’s behalf.

"The multi-year esports agency of record agreement with the Dallas Cowboys is an incredible opportunity to connect esports fans with the most valuable sports franchise on the planet,” Kenna said. “I believe that connecting the Dallas Cowboys with global esports fans represents limitless possibilities to grow revenue and profitability. We will continue to build GameSquare organically and with future acquisitions, and by bringing innovative and authentic ideas and activations to America's team. In addition, the Jones and Goff investment, along with the bought deal financing, will strengthen our balance sheet and allow us to execute on our growth strategy going forward."

As part of the merger, Cowboys CFO Tom Walker and Goff Capital Inc President Travis Goff will join the GameSquare board of directors, the company said.

"Professional gaming has grown at an incredible pace in the three and a half years since our group acquired Complexity Gaming," Jerry Jones said. "I am confident that the merger with GameSquare will fast track revenue growth at Complexity while staying true to the team's commitment to winning. We're investing in Justin's experience in esports, his financial background, and the bench strength of the team he leads to build GameSquare into the most successful esports organization in the world."

Based in Frisco, Texas, Complexity Gaming fields esports teams in CS:GO, Fortnite, Valorant, APEX Legends, Hearthstone, Madden and FIFA, which have won lifetime winnings of US$4.7 million. The organization is one of just four to have an exclusive partnership with popular esports streaming platform Twitch and it has attracted blue-chip sponsors, including GameStop Corp (NYSE:GME) (FRA:GS2C), Miller Lite and Herman Miller (NASDAQ:MLHR) (FRA:MHR). 

Complexity generated revenue of $5.1 million in the fiscal year ended March 2021, respectively. Together, management expects the combined company to generate about $28 million in revenue for the calendar year 2022.

Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com

Follow him on Twitter @andrew_kessel

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