PlayStudios to Merge with SPAC Led by Ex-MGM CEO Jim Murren
A couple of longtime Las Vegas friends are partnering to bring a privately held digital entertainment platform to the public markets through the process that’s become the latest darling of Wall Street, the SPAC.
SPAC stands for special purpose acquisition company, often known as blank check companies. Although they’ve gone through the SEC procedure for become publicly traded, SPACs often have no goods or services of their own but are armed with capital that they use to acquire private companies in friendly combinations.
Using a SPAC to enter the public markets became especially popular in 2020 with several gaming companies, such as DraftKings, Rush Street Interactive and Genius Sports Group, making such a move.
In this case, the acquiring SPAC — Acies Acquisition Corp. and traded on the NASDAQ — is led by a familiar name in the gambling world, Jim Murren, the former CEO of MGM Resorts International. The target company, PlayStudios Inc., is also led by a fairly familiar figure in Las Vegas, Andrew Pascal. He is a nephew of former casino mogul Steve Wynn with whom he worked (Pascal was related to Wynn’s ex-wife Elaine), and also had previously partnered with MGM properties through the app myVEGAS. The deal was announced Monday.
When previously working in the casino industry, Pascal developed a program of free-to-play games where users could earn points that could be redeemed for actual perks, such as meals, at Las Vegas resorts.
PlayStudios’ current model is similar. In a news release, it is described as an “award-winning developer of free-to-play casual games for mobile and social platforms that offer real-world rewards to loyal players.” Online users earn rewards at “over 80 partners and 275 entertainment, retail, travel, leisure, and gaming brands,” the release said.
The new combined company will take the Playtudios nameplate (trading as MYPS on the NASDAQ). Pascal will continue to lead the company.
"From our inception, we set out to create wonderfully compelling games that were free-to-play and offered real-world rewards," Pascal said in the release. "We’ve now demonstrated the positive, long-term impact of this value proposition with our current portfolio of apps, and we’re poised to carry that success into new products and new game genres. Becoming a public company and securing the resources and support of key institutional investors will enable us to accelerate our growth as we launch new products, pursue new acquisition opportunities, and scale up our unique playAWARDS loyalty program."
Valuation of $1.1 Billion
The SPAC transaction values PlayStudios at approximately $1.1 billion. The combination of PlayStudios and Acies is backed by financial muscle from institutional Investors including funds and accounts managed by BlackRock, ClearBridge Investments, Neuberger Berman Funds and MGM Resorts International, all of whom are participants in a $250 million PIPE (private investment in public equity).
In October, Acies Acquisition Corp. said it was seeking an initial public offering of $200 million, according to its SEC filing. That announcement came around the same time as Las Vegas-based SPAC Tekkorp went public.
In the filing, Acies said it was "focused on identifying a business combination target within the live, location-based and mobile experiential entertainment industries. Specific sectors that we will target span live events, family entertainment, casino gaming, destination hospitality, sports, sports betting and iGaming, and social and casual mobile games."
Earlier Monday, Tilman Fertitta, sole owner of Fertitta Entertainment — the parent company of Golden Nugget/Landry's — announced that his company will be merging with a special purpose acquisition company named FAST Acquisition Co. to take the hospitality and gambling giant public.
FAST, currently traded on the NYSE, is co-headed by Doug Jacob and Sandy Beall. The definitive merger agreement is expected to close in the second quarter of 2021. The transaction implies an enterprise valuation for Golden Nugget/Landry's of approximately $6.6 billion.
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