KELOWNA, British Columbia: ProSmart Enterprises Inc., a global online network connecting sports fans, teams and brands, has entered into a binding agreement to acquire all of the issued and outstanding shares of DL Hockey Consulting (Shenzhen) Limited and DL Hockey Consulting Limited.
DL Hockey operates an ice hockey club and skills camps in China, where 650 skating rinks are being built as part of its winter sports development plan in the run up to their hosting of the 2022 Winter Olympics. Of additional note, DL Hockey has built a national network of key ice hockey development relationships in China, which is one of the world’s largest and fastest-growing sports markets.
Chinese sports industry estimated to more than triple its $223 billion (2016) value by 2025 (Bank of China report, 2017)
Acquisition will provide ProSmart with access to China’s hockey community and industry
ProSmart, works with over 1,500 governing bodies in more than 100 countries. With this acquisition, the company will have successfully expanded its network into the Chinese sports market which, according to a 2017 Bank of China report, was estimated to be worth 1.5 trillion yuan ($223 billion) in 2016 and on track to reach 5 trillion yuan by 2025.
Alan Schuler, co-founder and CEO, states, “This is a highly-strategic deal which comes at a time when China’s Winter Olympics development plans have sent the sports industry into overdrive. DL Hockey has a strong, established presence in China and has built a tremendous reputation. This acquisition allows us to quickly and seamlessly integrate with China’s hockey community and industry which is expanding at an incredible rate. With over 65% of the population identifying themselves as sports fans, China has one of the largest sports markets in the world. With ProSmart’s global online network, unique content and unprecedented marketing platform, this acquisition has the potential to deliver considerable value for ProSmart shareholders and is part of our push into the Chinese market.”
ProSmart will retain the DL Hockey School brand and run ice hockey development programs under this banner. The company is now well positioned to leverage the momentum and credibility built by DL Hockey to expand ProSmart programs nationally in conjunction with the rapidly-growing community of rink developers and burgeoning hockey markets in China.
Says Doug Lynch, founder of DL Hockey, “I am extremely excited about joining the ProSmart family. The vision that Alan and senior management have created, aligns with my beliefs on the importance of youth sports for children of all ages. In a short time, I have truly connected with the players in our club, their families, as well as the Chinese culture. I remain dedicated to growing, not only hockey, but all other sports in China. The ProSmart learning platform is revolutionizing youth sports as well as training youth coaches and I feel grateful to be a part of the journey.”
DL Hockey was founded by, and is wholly-owned by Doug Lynch, a former professional ice hockey player.
Upon completion of the acquisitions, Lynch will join ProSmart as vice president of Business Development in China and will be responsible for strategic leadership and operations of the company’s China operations, including the growth of DL Hockey Schools nationally. Part of his compensation will be tied to a number of pre-established performance metrics.
Lynch will collaborate with arena development partners to position ProSmart as the leading ice hockey development system in China. He will also collaborate with sponsors, brands, growth partners, and develop revenue opportunities designed to increase the growth of DL Hockey, ProSmart’s Chinese brand and ProSmart Enterprises Inc., its Canadian parent company.
The agreement was signed on February 27 and the Acquisitions are expected to close on March 15 and is subject to the approval of the TSX Venture Exchange and ProSmart’s board of directors.
The purchase price is $86,250 payable in ProSmart common shares at a share price equivalent to the ten trading day volume-weighted average closing price of the shares on the TSX Venture Exchange immediately prior to the public announcement of the agreement.