Simplicity Esports, the U.S. organization that manages Flamengo Esports, has agreed to sell a 7.5% share of its Brazilian subsidiary Simplicity One Brasil, owner of the Brazilian team’s rights, to gaming peripherals manufacturer Redragon. The companies signed a letter of intent on Aug. 27, and the deal is subject to certain conditions before it is finalized.
A market valuation ordered by Simplicity established Flamengo Esports’ value at around $7M USD, fixing Redragon’s investment at around $525K USD.
A source familiar with the deal told The Esports Observer that the investment will go toward the acquisition of a franchise in the Brazilian Championship of League of Legends (CBLoL), which has a fixed value by Riot at 4M BRL (around $740K USD). To organizations that were not part of CBLoL before its switch into the franchising model in 2021, the price is 4.5M BRL (around $835K USD).
After diligence and completion of final terms, it is expected that Redragon will pay around $390K USD in cash and more than $133K USD in additional consideration, involving a sponsored training center, analytics, and a tournament platform to Simplicity managed by the peripherals company. Redragon was already a sponsor before this investment into the team.
Flamengo Esports is a brand related to Clube de Regatas do Flamengo, the most popular sports club in Brazil, but the whole esports operation and business were licensed in January 2020 for three years to Simplicity. The parent company, Simplicity Esports and Gaming Company, is open to new investors as it is publicly traded in the U.S. under the symbol WINR.
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