Saudi PIF launches Savvy Gaming Group, acquires ESL and FACEIT for $1.5 bn

The Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, has launched Savvy Gaming Group and acquired gaming companies ESL Gaming and FACEIT in two deals valued cumulatively at $1.5 billion.

The two companies will be merged to create ESL Faceit Group under Savvy Gaming, PIF said in a statement on Wednesday.

The PIF deal comes close on the heels of two other large gaming transactions this month, highlighting the rapid growth of an industry that has benefited from stay-at-home restrictions imposed during the Covid-19 pandemic.

Tech giant Microsoft said earlier this month it will acquire video game giant Activision Blizzard for $68.7 billion in its largest acquisition to date. Just days before, Take-Two Interactive said it was acquiring Zynga for $12.7 billion.

The move to acquire the two gaming companies is part of Saudi Arabia’s efforts to diversify its economy away from oil and gas and into technology-based new-age businesses. This comes even as gaming has taken off in a big way in the country, with several foreign investors looking to back homegrown startups.

Savvy Gaming bought ESL, one of the biggest esports companies in the world, from Swedish gaming giant Modern Times Group MTG AB for an enterprise value of $1.05 billion. It purchased FACEIT for $500 million.

MTG, which last year acquired Indian game developer PlaySimple for $360 million, said in a separate statement it owns 91.46% of ESL Gaming. This corresponds to $960 million of the total enterprise value and represents a total return on investment of 2.5 times, MTG said.

The PIF also said that the chief executive officers of the two companies it is buying—ESL’s Craig Levine and Niccolo Maisto of FACEIT—will become co-CEOs of the combined entity.