PlayStudios is the latest firm to unveil its intentions to go public, doing so via a $1.1bn valuation and a definitive merger agreement with Acies Acquisition Corp, a publicly-traded special purpose acquisition company.
Upon the closing of the transaction, the combined company will be named PlayStudios and remain listed on Nasdaq under the new ticker symbol “MYPS.”
Acies’ management team is led by chairman Jim Murren, formerly chairman and CEO of MGM Resorts International, and co-chief executive officers Dan Fetters and Edward King, formerly managing directors at Morgan Stanley.
PlayStudios is led by Andrew Pascal, founder, chairman, and CEO, who will continue to lead the combined group along with his current founder-led management team.
Each firm’s board of directions have approved the transaction, with the go-ahead now needed by stockholders of Acies. The deal, which is expected to close during 2021’s second quarter, is also contingent on the receipt of certain regulatory approvals.
“From our inception, we set out to create wonderfully compelling games that were free-to-play and offered real-world rewards,” said Pascal. “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.”
The transaction implies an enterprise valuation for PlayStudios of $1.1bn, or 2.5x projected 2022 revenue of $435m or 12.3x projected 2022 pro forma adjusted EBITDA of $90m.
Consideration to PlayStudios will comprise at least 89.1m shares of ACAC common stock and up to $150m in cash. In addition, funds and accounts managed by BlackRock, ClearBridge Investments, Neuberger Berman Funds, and MGM Resorts International are leading participants in the $250m PIPE, at a price of $10 per share of common stock of Acies immediately prior to the closing of the transaction.
After giving effect to the transaction, the company is expected to have approximately $290m of cash and a public equity currency to accelerate PlayStudios’ growth initiatives, which include expanding product development and acquisitions of other gaming and related companies.
Upon closing, and assuming none of Acies public stockholders elect to redeem their shares, existing PlayStudios shareholders are expected to own 64 per cent of the combined company, the Acies sponsors are expected to own three per cent, PIPE participants 18 per cent, and public stockholders 15 per cent
“Within today’s vast and growing games market, PlayStudios is unique in offering their audience the opportunity to play for fun and earn for real. They know how to make engaging and enduring games, and stand apart in having harnessed the power of a robust and full-featured loyalty program,” commented Murren.
“The focus is now to take PlayStudios platform and super-charge its growth. We have abundant initiatives, including targeted, strategic acquisitions; an expansion of the rewards program into new categories such as sports entertainment; and the exploration of opening the playAwards platform under a loyalty-as-a-service model. We look forward to leveraging Acies’ M&A knowledge and broad relationships for the benefit of PlayStudios and its shareholders.”