GameSquare acquires Faze Clan

A year after going public with a $725 million valuation, esports group sells for just $18.5 million in an all-stock purchase

GameSquare today announced that it has reached a deal to acquire gaming and esports outfit Faze Clan.

The all-stock deal will see each outstanding Faze Clan share swapped for a fraction of a share in GameSquare. Given the number of outstanding Faze Clan shares, potential shares from stock options, and yesterday’s closing share price of GameSquare, that would put the maximum amount of the deal around $18.5 million.

That’s a far cry from the $725 million valuation Faze Clan boasted when it went public last July in a SPAC merger.

However, the deal represents a premium of about 17% over Faze Holdings’ closing share price yesterday. With shares trading at $0.18, that would have put Faze’s total valuation around $15.8 million.

GameSquare is financing the deal in part by raising $10 million through the sale of new shares in the company and a loan agreement with SLR Digital Finance LLC.

“The gaming community represents one of the largest and most engaged segments of the attention economy,” said GameSquare CEO Justin Kenna.

“The acquisition of one of the biggest names in gaming serves as a perfect illustration of how we have built a powerful infrastructure with expansive scale that we can use to leverage the full spectrum of resources within the GameSquare ecosystem. We are also thrilled to welcome back the founders of Faze Clan and their fans, one of the most deeply engaged communities born on the internet.”

Faze Clan will operate as an independent but wholly owned subsidiary of GameSquare, with Richard “Faze Banks” Bengtson serving as the group’s CEO, Thomas “Faze Temperrr” Oliveira as president, and Yousef “Faze Apex” Abdelfattah as COO.

“I’m confident that with Tommy, Apex and me back in charge of the brand, Faze Clan will get back to where it was in its peak years,” Bengtson said. “We grew up on the internet and understand this brand better than anyone ever could. We are grateful to have found a partner in GameSquare who sees that value in us and can help execute our vision. We’re going to produce first, talk later.”

GameSquare expects to find $18 million in annual cost savings by streamlining corporate costs and other cost-cutting measures