By Hilary Russ
NEW YORK (Reuters) – The amateur esports platform Super League Gaming Inc has acquired the fast-growing social video network Framerate for $2.5 million in cash and stock, according to a corporate filing on Friday.
It is the first acquisition for Super League since going public in February and is likely just one of more deals yet to come for the company.
Framerate “will be fully integrated into Super League, instantly expanding our audience reach, creating more awareness for our live and digital experiences and becoming a foundational component of Super League’s content distribution network,” Super League’s chief executive, Ann Hand, said in a statement to Reuters.
Throngs of young fans are increasingly drawn to competitive video gaming on both the professional and amateur levels, and they often watch matches streamed live or in person.
Super League, which was founded in 2014, is aimed at amateur level players. It runs tournaments and community building events, sometimes in underused spaces including malls and movie theaters.
It offers matches in different games published by multiple developers, including League of Legends from Riot Games Inc, a unit of Tencent, and Fortnite, from Epic Games Inc.
On Super League’s first day of trading in February, shares opened at $11 but closed 23 percent lower, at $8.25. They still have not touched those opening highs, and closed at $6.83 on Friday. Even so, Wall Street analysts like the company’s management and growth prospects.
“With additional partnerships ramping and more on tap we believe (Super League) is the best pureplay public way to directly invest in the e-sports market opportunity,” wrote Lake Street Capital Markets analysts in a May research note.
The company is poised to “build out its platform and partners without accelerating cash consumption,” they wrote. They rated the stock a “buy” and gave a $15 share price target.
Northland Capital Markets also set a $15 target and took a similarly positive view of the company’s prospects.
Unlike some other sectors of the rapidly growing esports universe, both Super League and Framerate focus less on top stars and pro players and more on amateurs and everyday gamers who want to play, interact and create content.
Framerate launched just last year and already has more than 25 million video views so far in 2019 around the world.
(Reporting by Hilary Russ; Editing by Leslie Adler)