FaZe Clan, an esports and entertainment company, entered into a definitive merger agreement to combine with B. Riley Principal 150 Merger (BRPM), a special purpose acquisition company sponsored by an affiliate of B. Riley Financial. The proposed business combination transaction implies an equity value of approximately $1 billion for the combined company, inclusive of nearly $275 million of cash (assuming no redemptions). Through the proposed business combination, FaZe Clan is positioned to become publicly traded on a U.S. national exchange.
Upon completion of the proposed business combination, BRPM will change its name to “FaZe Holdings Inc.” The combined company’s common stock is expected to be listed on NASDAQ under the new ticker symbol “FAZE.”
The estimated gross transaction proceeds total $291 million, including $173 million in cash from BRPM’s IPO proceeds held in trust (assuming no redemptions) and $118 million from committed PIPE investments. Net proceeds from the transaction, which will include cash in trust net of any redemptions and PIPE proceeds net of transaction-related costs, will be used to fund organic and inorganic growth as the company expands its digitally native, global, multi-platform presence across content, gaming, entertainment and consumer products.
“We are thrilled to announce this important milestone of FaZe Clan’s plans to enter the public market,” Lee Trink, CEO of FaZe Clan, said. “In our short history, we have evolved from a disruptive content generator to one of the world’s most decorated and successful esports franchises and now into one of the younger generations’ most recognized and followed brands globally. We believe FaZe Clan is becoming the voice of youth culture, a brand that sits at the nexus of content, gaming, entertainment and lifestyle in the digital-native world. This transaction will provide us capital and access to the public markets, which will help us accelerate the expansion of our multi-platform and monetization strategy. We are so grateful to the millions of loyal fans who have helped us take FaZe Clan to the next level, without whom this would not have been possible. Lastly, we look forward to working with Dan [Shribman] and Bryant [Riley] and the B. Riley team and appreciate their support and confidence.”
“The business combination with FaZe Clan represents a tremendous opportunity to invest in the future of media and entertainment,” Shribman, who is the chief investment officer of B. Riley Financial and CEO and CFO of BRPM, said. “With unmatched social media reach and Gen Z engagement and the opportunity to meaningfully expand its global multi-platform presence across content, gaming, entertainment, consumer products and the metaverse, we believe FaZe Clan is a compelling investment with the potential to create significant value. We are excited to partner with Lee, Amit [Bajaj] and the incredible talent that make up the FaZe Clan team. Lee has surrounded himself with a creative and energetic team and we look forward to working with them on this journey.”
With funding from the proposed business combination, FaZe Clan plans to further diversify its revenue streams with user monetization, expansion of its global footprint and investment in new growth opportunities across the creator economy and emerging technologies in addition to an acquisition strategy.
The boards of directors of both FaZe Clan and BRPM approved the proposed business combination, which is expected to close in Q1/22, subject to regulatory and stockholder approvals.
Upon closing, the combined company will be led by Trink as CEO and chairman of the board, Bajaj as CFO, Kai Henry as chief strategy officer and Tammy Brandt as chief legal officer.
B. Riley Securities is acting as capital markets advisor to BRPM and as sole placement agent on the PIPE financing. Citi is acting as lead financial advisor to FaZe Clan. M. Klein and Company and Evolution Media Capital are also serving as financial advisors to FaZe Clan.
White & Case is acting as legal advisor to BRPM. Skadden, Arps, State, Meagher & Flom is acting as legal advisor to FaZe Clan. McDermott Will & Emery acted as legal advisor to the PIPE placement agent.