CM – Youth-focused digital platform FaZe Clan signs $ 1 billion SPAC deal to go public

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The youth-oriented online platform FaZe Clan Inc. is going public with a special acquisition company with a valuation of around 1 billion US dollars, the companies said.

FaZe Clan, based in Los Angeles markets itself as a leading online gaming company and a young people-created brand aimed at Millennials and Generation Z consumers. The business includes eSports, merchandise and digital content. According to the company’s website, the FaZe Clan has a global reach to a community of approximately 350 million people through its social media platforms.

The FaZe Clan was founded in 2010 and has partnerships with major brands such as McDonald’s Corp. and Totino’s Pizza Rolls, which is owned by. is located

General Mills Inc.,

hoping to reach younger consumers.

The company merges with SPAC

B. Riley Principal 150 Merger Corp.

BRPM 12.94%

, a blank check company supported by

B. Riley Financial Inc.

RILY 1.03%

The Wall Street Journal previously reported that both sides are nearing an agreement.

Fast growing digital platforms have been flocking to SPAC deals recently to raise large sums of money and increase brand awareness through an IPO. For the past few years, sports betting companies have

DraftKings Inc.,

Mobile gaming company

Skillz Inc.

and the digital media platform BuzzFeed Inc. have completed or announced similar mergers.

« The great opportunity is our direct relationship with the huge audiences we have. »

Lee Trink,

FaZe Clan’s CEO said in an interview. « It’s a very large, very vibrant community that we’re deeply rooted in. »

The personalities who create content for the FaZe Clan include professional athletes

Kyler Murray

and

Ben Simmons.

The singer

Pit bull

and several other sports and entertainment characters are among the company’s investors.

As part of the SPAC deal, the FaZe clan is raising approximately $ 120 million through a private investment in public equity (PIPE) related to the merger .

The B. Riley SPAC has approximately $ 170 million. Some or all of the money could also increase the FaZe clan’s cash proceeds from the deal. Because SPAC investors have the right to withdraw their money before a merger is complete, a SPAC’s money pile can run out of money before a deal is made.

Low stock prices often motivate investors to withdraw funds. Such withdrawals have skyrocketed in recent months amid a decline in prices for many companies that merged with SPACs, making it difficult for many companies to complete their blank check mergers.

A SPAC is a mailbox company that raises money Trading on an exchange begins to merge with a private company and bring it to the exchange. The private company will then replace the SPAC on the stock exchange. SPAC deals have exploded last year, partly because they allow startups like the FaZe clan to make business forecasts that are not allowed in traditional IPOs.

The FaZe clan predicts the one expected this year Revenue of approximately $ 50 million will grow rapidly in the coming years. The company is unique in that it can expand without burning a lot of money, said

Dan Shribman,

the CEO of B. Riley SPAC.

SPACs were hot investments earlier this year and then fell in popularity after many companies that went public this way struggled to meet their business goals.

There has been some excitement in the past few days returned to the sector after the former president

Donald Trumps

The new social media company announced that through the merger with SPAC Digital World Acquisition Corp. to go public. SPAC’s shares rose nearly ten-fold in the two days after the deal was announced, after individual investors piled up. The gains were unprecedented for SPACs, implying a multi-billion dollar valuation for Mr Trump’s startup.

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