Online performance marketing company SharpLink Gaming is set to sell its fantasy sports and sports game development business units to RSports Interactive.
The US$22.5m deal, an all-cash transaction, will see the SportsHub/fantasy sports and free-to-play business units sold to RSports.
The sale “significantly strengthens” SharpLink’s working cash position, it said, providing the capital necessary to “extinguish nearly $19.4 million in interest bearing debt – all without having to rely on dilutive equity financings to support the Company’s future growth.”
SharpLink added that with the sale consummated, it expects to “significantly reduce its operating expenses, primarily due to a significant reduction in headcount, lower office lease costs, greatly diminished state licensing requirements, elimination of interest-bearing debt service and other resulting cost savings, thereby positioning the company with the ability to achieve positive cash flow from its remaining performance marketing business on an accelerated basis.”
The sale of the company’s fantasy sports and free-to-play games development businesses “positions SharpLink as a pure-play, performance marketing company serving the global sports betting and igaming industries,” it said.
SharpLink also announced that as part of the sale, chief operating officer and board member Chris Nicholas has resigned, effective immediately.
Rob Phythian, SharpLink’s CEO, said the company is “confident that our fantasy sports and sports game development businesses will continue to thrive and prosper in the great hands of RSports, which has exciting plans to elevate the combined businesses to new heights.”
He added: “Our remaining sports betting and igaming performance marketing business will be more focused and simplified, allowing us to prioritise innovation and organic growth, while empowering us to look for strategic opportunities to strengthen SharpLink’s position as a trusted solutions provider to both current and future business partners.”
