ISRAEL-BASED ENTRYPOINT BUYS LEGACY TELECOMMUNICATIONS BUSINESS FROM SHARPLINK GAMING
MINNEAPOLIS, MN / ACCESSWIRE / November 10, 2022 / SharpLink Gaming Ltd. (Nasdaq:SBET) ("SharpLink" or the "Company"), a pioneer of targeted, data-driven user engagement and conversion solutions for the U.S. sports betting and iGaming industries, today announced that Israel-based Entrypoint South Ltd. ("Entrypoint"), a subsidiary of Entrypoint Systems 2004, Ltd., has signed a Share and Asset Purchase Agreement with the Company to acquire SharpLink's legacy Mer Telecommunications Systems business ("Legacy MTS") in a one-year earn-out transaction, subject to customary closing conditions and required regulatory approval from the Israel Innovation Authority.
In consideration of Entrypoint acquiring all rights, title, interests and benefits to Legacy MTS, including 100% of the shares of MTS Integratrak Inc., one of the Company's US subsidiaries, it will pay SharpLink an earn-out payment equal to three times Legacy MTS' Earnings Before Interest, Taxes and Depreciation ("EBITDA") for the year ending December 31, 2023, up to a maximum earn-out payment of $1 million (adjusted to reflect net working capital as of the closing date).
Legacy MTS's business concentrates on worldwide provision of telecom expense management ("TEM") solutions which assist enterprises and organizations to make smarter choices with their telecommunications spending at each stage of the service lifecycle, including allocation of cost, proactive budget control, fraud detection, processing payments and spending forecasting. In July 2021, SharpLink merged with Mer Telemanagement Solutions Ltd., which at the time owned the Legacy MTS business, in a go-public transaction. Following the merger, SharpLink has operated Legacy MTS and its related subsidiaries as a business unit which has been reported in financial filings as its Enterprise TEM segment. In June 2022, SharpLink's Board of Directors provided management with approval to enter into negotiations with prospective buyers of Legacy MTS due to the fact that Legacy MTS's business is not complementary nor of any strategic benefit to SharpLink's focus on the emerging U.S. sports betting and iGaming industries.
Commenting on the transaction, Rob Phythian, Chief Executive Officer of SharpLink, stated, "We are pleased to have found a buyer which is in the same line of business as Legacy MTS and is capable of deriving value from the Legacy MTS business on a go-forward basis. Moreover, this transaction provides our management team with the ability to now focus its time, energy and resources strictly on building and expanding SharpLink's core strengths in pioneering new, innovative sports betting conversion technologies, sports game development services and other sports fan engagement solutions."
Established in 2004, Entrypoint is a professional services company that delivers business transformation across multiple industries, project outsourcing and IT managed services. With Entrypoint, companies create a powerful and secure, infrastructure to meet better business goals.
"The acquisition aligns with our strategic plan to provide digital transformation solutions beyond Israel," said Ohad Pettel, Entrypoint's CEO. "Legacy MTS's extensive client base in North America is very much in our focus. The acquisition of Legacy MTS is part of Entrypoint's strategy to deliver IT and digital transformation solutions that enable our customers to achieve their business mission. With Legacy MTS's purchase, Entrypoint gains complementary solutions for present and new customers, creating a full ecosystem of telecommunications, core technology platforms and staff augmentation. Entrypoint believes the addition of the Legacy MTS products and services can impact Entrypoint's long-term goals to become a market leader and a substantial professional services provider in the global market. With a wide span of technological partnerships, tapping the Israeli startup nation ecosystem Entrypoint plans on bringing this knowhow and advantage to the US market."
"We further believe a U.S. presence is a must in today's digital transformation landscape, enabling Entrypoint the footprint we were seeking for a while and is the first part of our strategic M&A plan for the near future to expand and acquire more companies and product lines to that end," said Benjamin Copeland, Vice President of Business Development of Entrypoint.
About SharpLink Gaming Ltd.
Founded in 2019 and based in Minneapolis, Minnesota, SharpLink is a leading online technology company that connects sports fans, leagues and sports websites to relevant and timely sports betting and iGaming content. SharpLink uses proprietary, intelligent, online conversion technology to convert sports fans into sports bettors for licensed, online sportsbook operators. SharpLink's intelligent C4 Sports Betting Conversion technology delivers and determines the best sportsbook betting offers and experience for each identified user. Using sophisticated, behavioral modeling and tracking technologies, and by analyzing user's past and present behaviors, SharpLink serves sports fans with personalized betting offers specifically tied to each fan's favorite sports, teams and players. Additionally, SharpLink specializes in helping sports media companies develop strategies, products and innovative solutions to drive deep customer engagement with highly interactive sports games and mobile applications. SharpLink is run by industry veterans with several successful exits in the sports gaming and iGaming sectors. For more information, please visit the SharpLink website at www.sharplink.com.
This release contains forward-looking statements that are subject to various risks and uncertainties. Such statements include statements regarding the expected growth in the online betting and iGaming industries, the Company's ability to grow its business, the potential benefits of the Company's products, services and technologies and other statements that are not historical facts, including statements which may be accompanied by the words "intends," "may," "will," "plans," "expects," "anticipates," "projects," "predicts," "estimates," "aims," "believes," "hopes," "potential" or similar words. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including without limitation, the Company's ability to achieve profitable operations, government regulation of online betting, customer acceptance of new products and services, the effects of the spread of Coronavirus (COVID-19) and future measures taken by authorities in the countries in which the Company operates on its operations, the demand for its products and its customers' economic condition, the impact of competitive products and pricing, the lengthy sales cycle, proprietary rights of the Company and its competitors, general economic conditions and other risk factors detailed in the Company's annual report and other filings with the United States Securities and Exchange Commission. The Company does not undertake any responsibility to update the forward-looking statements in this release.
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SOURCE: SharpLink Gaming Ltd.