Playstudios Goes Public with $1.1bn SPAC Deal
Playstudios Inc. announced it is going public via a $1.1 billion merger with a special purpose acquisition company Acies Acquisition Corp.
The online game operator backed by MGM Resorts International said it’s combining with the SPAC, a shell company founded last year. The existing chairman of Acies is Jim Murren, who is the former CEO of MGM. Murren has a non-compete agreement with his former employer that prevents him from entering into businesses related to gaming facilities. The agreement expires on March 22. The news of the deal was first reported by Bloomberg last week.
What Changes Can We Expect?
The merger plan entails no revolutionary changes in administration as Playstudios’ founder, and CEO Andrew Pascal will keep his job with the new company. Besides, he is a co-founder and advisor to Acies.
Playstudios shareholders will get $150 million in cash and own almost 64% of the new entity’s shares. Additionally, institutional investors will inject $250 million into the business. Those investors include MGM Resorts, BlackRock Inc., and Neuberger Berman Funds. MGM offers free rooms to Playstudios players to build loyalty and will own nearly 10% after its additional investment.
Usually, social online games allow customers to purchase an in-game currency to keep playing and reach higher levels. Playstudios, however, simultaneously earns points in the company’s own loyalty program, which can be exchanged for real-world prizes like discounted meals or shows tickets.
The deal is likely to close in the second quarter of 2021, with the combined company to be named Playstudios, which will remain listed on the NASDAQ under MYPS.
In an interview, Pascal stated that he plans to use the money raised through the offering to expand the business. “We’ll now have the currency and capital to go acquire other companies and games.”
Murren said the focus is to take Playstudios platform and super-charge its growth, adding that the company has abundant initiatives, including targeted, strategic acquisitions. “We look forward to leveraging Acies’ M&A knowledge and extensive relationships for the benefits of Playstudios,” said Murren.
In October, Acies Acquisition Corp. announced it was acquiring a public offering of $200 million. In the filing, the SPAC entity said it focused on identifying a business combination plan with the location-based live and mobile experimental entertainment industries. The specific sectors that Acies was targeting included iGaming, mobile sports betting, and social and casual mobile games.
SPAC, also known as black check companies, pool cash and then conclude deals with businesses looking to go public. Using a SPAC to enter the public sectors became popular in 2020 with several gaming entities, such as DraftKings, Skillz, Rush Street Interactive, and Genius Sports Group went public last year.