$1.1 billion PlayStudios Merger, Public Offering Announced

Article by : Helen Feb 9, 2021

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Officials at free mobile-gaming provider PlayStudios announced a planned $1.1 billion merger with Acies Acquisition Corp. After completing the planned merger, PlayStudios intends public shares listing on the NASDAQ Stock Exchange.

Las Vegas-based PlayStudios began operations in 2011 and initially thrived on financial support from gaming producer Activision Blizzard and MGM Resorts. Its free online gaming platform provided blackjack and slots that rewarded players with special discounts and other incentives at MGM gaming properties. Players also could buy a special currency used only while playing blackjack or online slots at PlayStudios and earn special incentives from PlayStudios as well as MGM Resorts.

PlayStudios has its own loyalty rewards program that enables customers to win various prizes of relatively significant value. Those include free tickets to shows on the Las Vegas Strip and steeply discounted meals at world-class restaurants. Players have collected more than $500 million in real-world rewards while playing the free games and risking nothing.

PlayStudios also created MGM Resorts’ playAWARDS loyalty rewards program that benefits guests at MGM Resorts’ many gaming properties. The program partners with more than 80 global business partners and offers special prizes and price incentives through 275 retail, entertainment, travel and leisure, and gaming brands. Former MGM Resorts International CEO Jim Murren chairs Acies Acquisition, which formed a year ago. The merger leaves PlayStudios’ CEO and founder Andrew Pascal in charge of the new entity, which will continue operating under the PlayStudios banner. Pascal says he will use the investment from Acies Acquisition to grow the corporation and expand its offerings.

Several institutional investors are helping to fund the merger with $250 million in investment cash. PlayStudios’ shareholders will get a combined $150 million parceled out based on the number of shares they own in the new entity. They also will own about 64 percent of total shares in the new corporation. Several smaller investment partners will own about 18 percent of shares and other partners about 3 percent in the new entity. That leaves about 15 percent of total shares available for the initial public offering – or more than 13 million common shares.

The merger’s $1.1 billion costs are about 2.5 times PlayStudio’s projected revenues of $435 for 2022. It also is more than 12 times the firm’s adjusted EBITDA of $90 million for 2022. A total of 89.1 million common shares will be available for the initial public offering.

The public offering would make PlayStudios the first publicly traded mobile games producer that also provides real-world rewards of significant value. It also enables Pascal and Murren to drive more investment while expanding the new PlayStudios entity.

Murren says PlayStudios has a unique business model that provides free entertainment while delivering real-world rewards to those who choose to play. The many hours of fun people can get from playing free blackjack, and mobile slots help to supplement their future entertainment and travels. That kind of a compelling business model helps to send countless consumers to MGM properties and business partners who deliver the special incentives for PlayStudios’ game players.

Pascal and Murren say the corporation likely will grow via new product offerings and strategic acquisitions of other companies and entities. The new product offerings likely would include more gaming titles and expand into RPG games and other genres. That would help PlayStudios to grow its share of what IBISWorld says is a $152 billion global gaming market that is growing.

The boards of directors for PlayStudios and Acies Acquisition officially approved the transaction, which now hinges on the support of shareholders in Acies. Officials expect the merger to wrap up by summer.