Baker McKenzie has advised Swedish E-sports company Ninjas in Pyjamas (NIP) on its merger with Chinese E-sports group ESV5 – the first M&A in the expanding world of E-sports.
The merger establishes NIP Group, a organization that will field teams in all the major E-sports titles. NIP chief executive Hicham Chahine said the deal allows the team to take a “gigantic step” towards becoming truly global.
The Baker McKenzie team was led by partner Tracy Wut (M&A, Hong Kong), with support from partners Joakim Falkner (capital markets, Stockholm), Anna Orlander (M&A, Stockholm), Linnea Back (tax, Stockholm), Adam Farlow (capital markets, London), associate Erik Holmgren in Stockhom and counsel Lei Ye of FenXun Partners in Shanghai.
Chahine, who will adopt a co-CEO position, said NIP Group will continue to look for growth opportunities both organically and with acquisitions, as well as equity capital raising opportunities.
“We came across Victory Five more than a year ago. Initial meetings were positive, and we soon came to realize that both parties’ views on the industry were strongly aligned and that there was serious potential for something much bigger,” he said.
Formed in the year 2000, NIP is best known for its Counter-Strike teams, and it has fielded rosters across multiple titles including VALORANT, Rainbow Six: Siege and FIFA.
ESV5 is a joint venture by Chinese E-sports programs eStar Gaming and Victory Five and is backed by Chinese video live streaming service DouYu and Chinese anti-virus firm Qihoo 360.
Mario Ho (son of the late Macau casino magnate Stanley Ho) is an investor and chief executive of ESV5 Group and will become the co-CEO of NIP Group.
After the merger, NIP will re-enter the competitive League of Legends (LoL) play in 2022 with Victory Five — owned by the ESV5 group — to be rebranded as Ninjas in Pyjamas and continue competing in the League of Legends Pro League (LPL), the premiere Chinese League of Legends competitions.
If the merged entity were to be listed on NASDAQ it would be the first publicly-traded E-sports team in the US with a combined revenue of more than US$61.70 million for 2021.
China is the world’s largest gaming market and some of the world’s top video-games companies such as Tencent and NetEase are based there.
China had 388 million E-sports viewers in 2020, up 21.3% a year prior, according to video games consultancy Niko Partners.