It’s the end of a (brief) era. The saga of FaZe Clan (NASDAQ: FAZE) as a public entity is about to come to an end with the announcement this morning that GameSquare Holdings (TSXV: GAME) will be acquiring the brand in an all stock transaction.
The transaction will see FaZe shareholders receive 0.13091 of a common share of GameSquare for each share held, equating to compensation of roughly $0.29 a share. The figure values FaZe at roughly $22.5 million, a sharp drop from the $725 million figure ascribed to it when it went public via a SPAC transaction just a year ago.
The resulting company is expected to be a global leader in content, media and entertainment focused on gaming, esports and youth culture. On a combined based the entity generates annual revenues of $138 million, with margins of 26.3%, with clients including the likes of Miller Lite, Jack in the Box, Porsche and more. Social followers meanwhile are said to be more than 1.0 billion.
As part of the transactions, the founders of FaZe Clan are reported to be returning to the brand, with Richard Bengtson to the be the CEO of what will be a GameSquare subsidiary, while Thomas Oliveira will take on the role of President, and Yousef Adbelfattah the role of COO. The founders are said to be focused on re-engaging with its core fanbase and refreshing the brand.
The deal meanwhile is anticipated to result in synergies and cost savings of $18 million as a result of reduced corporate costs.
The transaction has been unanimously approved by the directors of both GameSquare and FaZe Clan, with the deal expected to close in Q4 2023. Following the close of the merger, FaZe Clan will have the right two designate two directors, and to mutually agree with GameSquare to a third director. GameSquare meanwhile will have the rights to appoint six directors.
In connection with the merger, GameSquare is expected to secure a loan facility for not less than $10 million, and will raise via certain accredited institutional investors $10 million.
GameSquare last traded at $2.25 on the TSX Venture.
Information for this briefing was found via Sedar and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
