Gamification platform Backstageplay has announced the mutual termination of its merger agreement with North-American esports organisation eUnited.
The merger agreement between the two organisations was first revealed in June 2020, with eUnited stakeholders claiming 60 per cent of the new entity. This would have resulted in a reverse takeover of the Toronto Stock Exchange Venture Exchange (TSXV)-listed Backstageplay as a result.
Following a press release by Backstageplay, the agreement is now null and void, with the firm citing that the impact of the global health pandemic was a major factor in the termination.
The release from Backstageplay read: “Due to difficult market conditions, exacerbated by the economic uncertainty of COVID-19, the company and eUnited determined they would not be able to consummate the transaction with the associated conditions at this time.
“The company and eUnited have agreed to continue discussions as to commercial and strategic alternatives through which they can forge a continuing relationship.”
Backstageplay did add that the firm is still looking at building the ‘synergies between esports and social gaming’, particularly with eUnited in the future. Nevertheless, it seems that those strategic partnerships and activations will be completed without the opportunity to merge the two entities.
Moreover, the gamification platform has also outlined that it plans to still explore other opportunities in the esports sector to ensure that it carries out its goal of integrating competitive gaming into its services.
Esports Insider says: Whilst many investments and mergers have been successful across the esports ecosystem over the past few months, the news of Backstageplay and eUnited’s mutual termination does highlight how the coronavirus pandemic is still affecting the industry and its ability to develop. Even though it is understandable, the merger agreement’s termination will ultimately be a major blow to eUnited and Backstageplay.