Florida-based esports organisation Simplicity Esports has signed documents to acquire three additional franchisee-owned gaming centres in California and Washington.
In total, Simplicity Esports now has nine corporate-owned, and 20 franchisee-owned gaming centres which are currently open and operational – not including 12 franchisee locations which remain closed due to government health mandates. These gaming centres, including the latest three acquisitions, are said to have generated over $2m in combined revenues last year.
Simplicity Esports President Roman Franklin commented on the signing in a release: “COVID-19 related social distancing and capacity restrictions have had a negative impact on traffics counts for some of our gaming centres, but other locations are having record-setting months for membership sales. One of our corporate-owned gaming centres in Texas sold a record number 37 new memberships so far during the month of October.
“2020 has presented us with an amazing opportunity to invest in the acquisition of gaming centres while simultaneously capitalising on disruptions in commercial real estate that allow us to sign new five to 10 year leases with rent calculated as a percentage of gross sales.
“The EBITDA profile of the acquisitions is attractive to Simplicity because of the reduction of the largest fixed expense through the signing of new percentage rent leases. These acquisitions allow Simplicity Esports to report the full revenues generated by these gaming centres on a consolidated basis.”
Simplicity is said to have executed six additional non-binding letters of intent, outside of the three revealed, for the acquisition of gaming centres with new percentage rent leases from landlords. The six additional acquisitions deals are expected to close by November 15th, 2020, according to a release.
Esports Insider says: Simplicity Esports has fast-tracked its acquisition spree this year with a number of purchases across the United States. Surprisingly, while still feeling effects from the pandemic crisis, physical gaming locations are being swept up left-and-right, and Simplicity is one of the groups at the forefront of that.