GameSquare Holdings and FaZe Holdings announced that the two companies have entered into a definitive agreement under which GameSquare will acquire FaZe Clan in an arm’s length all-stock transaction. The deal combines two complementary businesses to create one of the world’s leading content, media, and entertainment companies focused on gaming, esports, and youth culture.
The terms of the deal were undisclosed. However, sources with Bloomberg reported that the stock deal is worth $17 million. This is a significant discount from the $725 million valuation of FaZe Clan as of July 2022 following a merger with a SPAC company.
A progressive end-to-end platform of leading media and agency organizations, gaming and esports teams, creative services, and technology capabilities will power the combined company. FaZe Clan and GameSquare generated annual revenue of approximately $138 million and achieved a 26.3% gross margin in 2022. GameSquare management expects to realize over $18 million in run-rate cost savings from the FaZe Clan acquisition, supported by reduced duplicate corporate costs and other savings. And the combined company plans to give guidance once the transaction is closed.
The combination with FaZe Clan is continuing GameSquare’s strategy of acquiring leading companies focused on esports, gaming, and youth culture to increase capabilities, grow scale, unlock cost savings, empower fans and creators, and drive shareholder value.
The combination of FaZe Clan and GameSquare:
— Returns FaZe Clan’s founders to lead the brand and reestablish authenticity
— Richard “FaZe Banks” Bengtson to be CEO of FaZe Clan, which will operate as a wholly owned subsidiary and independent division of GameSquare
— Thomas “FaZe Temperrr” Oliveira to be President of FaZe Clan
— Yousef “FaZe Apex” Abdelfattah to be COO of FaZe Clan
— The founders are focused on refreshing the FaZe Clan brand, re-engaging with its core fanbase, and empowering individual FaZe Clan creators and their communities
— It establishes a leading platform connected to esports, gaming, and youth culture
— The deal establishes a top creator network in gaming and esports with over 250 million hours of content watched in 2022 across both companies’ talent networks
— The talent network includes leading gaming, sports, and entertainment personalities such as Ninja, TimTheTatman, Max Holloway, Trevon Diggs, FaZe Banks, FaZe Temperrr, FaZe Apex, FaZe Nickmercs, FaZe Rug, FaZe Swagg, etc.
— Combines hyper-engaged global fanbases with over 1 billion combined social followers, with a core focus on 13 – 34 -year-old audiences
— Utilizes GameSquare’s progressive, end-to-end platform to connect global brands with hard-to-reach audiences
— This robust infrastructure is supported by award-winning media and agency assets, influential gaming and esports teams, leading creative services, and best-in-class, SaaS-based technology assets
— This deal unites a powerful portfolio of brand partners, including Porsche, Nike, Jack in the Box, Xfinity, Miller Lite, H-E-B, and GHOST
— The combination with FaZe Clan enhances GameSquare’s growth potential by increasing brand opportunities across GameSquare’s product offerings
— This deal enhances scale and unlocks significant cost-saving opportunities
— Management expects to realize more than $18 million in run-rate cost savings, supported by reduced corporate costs and focus on driving efficiencies across the organization
KEY QUOTES:
“The gaming community represents one of the largest and most engaged segments of the attention economy. 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.”
— Justin Kenna, CEO of GameSquare
“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. 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.”
— Richard “FaZe Banks” Bengtson – who will take on the CEO role of FaZe Clan after the transaction closes
“Joining forces with GameSquare creates greater scale and exciting opportunities in the emerging market for gaming and youth culture. The strength of the FaZe brand and GameSquare’s infrastructure are a powerful combination that will enable FaZe shareholders to benefit from the combined company’s long-term value creation potential.”
— Christoph Pachler, Interim CEO of FaZe Clan
