GameSquare Signs LOI to Acquire Reciprocity

GameSquare Signs LOI to Acquire Reciprocity

 

Canadian gaming and esports company GameSquare Esports has signed a Letter of Intent (LOI) to acquire 100% of the issued and outstanding shares in Reciprocity Corp, a privately held gaming and esports company.

Under the terms of the LOI, GameSquare Esports will issue 43,750,000 common shares of GameSquare to the shareholders of Reciprocity. Reciprocity shareholders will receive 10 million additional GameSquare common shares if the Reciprocity business generates a minimum of US$5 million of revenue and US$1 million of EBITDA within 12 months of closing and an additional 10 million GameSquare common shares if the Reciprocity business generates a minimum of US$7 million of revenue and US$1.4 million of EBITDA within 12 months of closing.

“The acquisition of Reciprocity is another step toward building Canada’s leading esports company. The team at Reciprocity has built a great organization that I believe will change the way the market looks at esports investing. Reciprocity and its wholly owned subsidiary GCN, Inc. (GCN) are led by industry veterans that understand the convergence of media, entertainment, sports and finance as shown by the top tier clients that GCN works with, while committing to growing an EBITDA positive business. I have high expectations of the leadership at Reciprocity and believe this will prove to be a transformative moment for GameSquare. We also believe the acquisition shows there is tremendous opportunity to acquire other companies serving the esports market that can benefit greatly as part of the GameSquare group of companies,” Kevin Wright, CEO of GameSquare, said.

“The acquisition by GameSquare is the start of another exciting chapter for Reciprocity. We have identified a highly scalable vertical within esports and I believe that bridging the gap between brands, gamers and esports is the path to high revenue growth, EBITDA and the creation of tremendous shareholder value. We work with top tier global brands and see fantastic synergies between our North American operations and GameSquare’s presence in the UK and EU through Code Red Esports. The opportunity to become part of the GameSquare group of companies is anticipated to accelerate our revenue growth and help us to realize our long-term vision of building a significant gaming and esports digital media company,” David Fawcett, CEO of Reciprocity, said.

The acquisition remains subject to, among other things, the parties entering into a definitive agreement, applicable shareholder and regulatory approvals.

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