GameSquare Esports - CEO, Justin Kenna.
CEO, Justin Kenna.
Source: GameSquare Esports.
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  • GameSquare Esports (GSQ) has signed a definitive agreement to acquire Cut+Sew/Zoned, a gaming and lifestyle marketing agency
  • Total consideration is up to C$7.85 million in cash and shares
  • Cut+Sew/Zoned’s clients have included Fortune 100 consumer brands and gaming companies such as HyperX and Amazon’s Crown Channel
  • The companies expect the acquisition to close later in July
  • GameSquare Esports is an international gaming and esports company
  • GameSquare Esports (GSQ) is unchanged at $0.40 per share

GameSquare Esports (GSQ) has signed a definitive agreement to acquire Cut+Sew/Zoned, a gaming and lifestyle marketing agency.

Based in Los Angeles, California, Cut+Sew/Zoned’s clients have included Fortune 100 consumer brands and gaming companies such as Amazon’s Crown Channel, HyperX and Play One Up.

GameSquare expects to issue 2 million common shares priced at C$0.50 per share, $3 million in cash plus earnout incentives, for a maximum consideration of up to $7.85 million.

The transaction represents an acquisition multiple of 1.6 times enterprise value to sales and 4.1 times EV/EBITDA if earnout milestones are achieved within 24 months following the closing.

GameSquare believes Cut+Sew/Zoned will add additional marketing and strategy capabilities with a focus on traditional sports, gaming, emerging technology, new media, music and fashion.

Cut+Sew/Zoned’s co-founders and management have agreed to continue to operate the company following the closing.

The companies expect the acquisition to close later in July.

Justin Kenna, CEO of GameSquare, commented,

“Under GameSquare, I see tremendous potential for Cut+Sew/Zoned to accelerate their top line growth while generating healthy EBITDA margins of roughly 40 per cent, based on past performance, adding to our portfolio of companies. I expect that Cut+Sew/Zoned will be instrumental in helping to monetize our wholly owned subsidiary’s (Complexity Gaming) incredible media assets, and their work in sports will be an incredible addition to the agency of record agreement that was recently signed with the Dallas Cowboys.”

Matt Hilman, the co-founder of Cut+Sew/Zoned, added,

“On behalf of my co-founders, Devon Woodruff and Sean Maher, I’d like to say that Cut+Sew/Zoned is ready to hit the ground running and to add value across GameSquare’s portfolio of companies and help it to become the global success that we know it can be.”

GameSquare Esports is an international gaming and esports company.

GameSquare Esports (GSQ) is unchanged at $0.40 per share as of 10:31 am ET.

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