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FaZe Clan to Merge With SPAC and Go Public at $1 Billion Valuation

Pitbull is among investors in gaming and entertainment company

FaZe Clan, a youth-centric online platform, is going to merge with special-purpose acquisition company (SPAC) B. Riley Principal 150 Merger Corp. The combined company plans to go public on NASDAQ (ticker symbol: FAZE) with a $1 billion valuation, and will have $275 million in cash on hand.

As part of the deal, FaZe Clan is raising $118 million through a private investment in public equity (PIPE) associated with the merger. That becomes $275 million when factoring in what B. Riley had to invest.

Pitbull is among FaZe Clan’s investors, as are other members of the entertainment and sports circles. Existing FaZe Clan stockholders will own 68% of the equity interest in the new company.

The deal is expected to close in the first quarter of 2022, subject to regulatory and stockholder approvals.

FaZe Clan began more than a decade ago as a small group making montages from first-person shooter games. While it maintains a major gaming presence, FaZe Clan has branched out into sports, culture, entertainment and retail, and has more than 350 million followers combined across social media platforms.

FaZe Clan CEO Trink will be CEO and chairman of the board at the new company. Additionally, Amit Bajaj will be its chief financial officer, Kai Henry will be the chief strategy officer and Tammy Brandt will be chief legal officer.

Though it started out with just gamers, the FaZe Clan roster now includes NBA star Ben Simmons, NFL quarterback Kyler Murray, rapper Lil Yachty and LeBron James’ son. FaZe Clan also has existing deals with major corporations looking to reach young demographics, including McDonald’s and the General Mills-owned Totino’s Pizza Rolls.

SPACs are often referred to as “blank-check companies.” Investors in a SPAC are not aware of how their money will ultimately be spent.

The SPAC model is to go public immediately, solicit funds from backers, and then go find companies with which to merge. The model is all the rage these days in Hollywood and beyond; even former President Donald Trump is attempting to launch a media company backed by a SPAC.

“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,” Trink said in a statement Monday. “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.”

Dan Shribman, B. Riley’s chief investment officer, added: “The business combination with FaZe Clan represents a tremendous opportunity to invest in the future of media and entertainment. 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.”