Posted on: January 27, 2021, 09:21h.
Last updated on: January 27, 2021, 09:33h.
Blank-check firm Acies Acquisition Corp. (NASDAQ:ACACU) is proving who you know is always important in business.
The special purpose acquisition company (SPAC) created last year by former MGM Resorts International (NYSE:MGM) CEO Jim Murren, Dan Fetters and Edward King — the latter two ex-investment bankers at Morgan Stanley — is reportedly in discussions to take MGM-backed Playstudios public. Bloomberg originally reported the news, citing unidentified sources close to the matter.
Acies already has ties with the merger target. Andrew Pascal, the CEO of Playstudios, is a cofounder and adviser to Acies. The longtime casino-industry executive previously served as president of the Wynn Las Vegas resort,” according to the news agency.
Pascal’s aunt is Elaine Wynn, the ex-wife of Steve Wynn. He started Playstudios in 2011, making it one of the original names in the now fast-growing social casino industry.
A merger between Murren’s Acies and Playstudios could value the target at $1 billion or more. The SPAC debuted in the fourth quarter of 2020, trimming its initial public offering (IPO) size to $200 million from $300 million. While a deal with Playstudios isn’t confirmed, Acies stock is reflecting expectations that it will come to fruition, as it’s higher by nearly four percent in midday trading.
In a trend largely touched off last year by DraftKings (NASDAQ:DKNG), the gaming industry is one of the epicenters of SPAC fever, with several companies becoming publicly traded entities via mergers with blank-check firms.
Many of those transactions focused on iGaming and sports betting. For example, Tilman Fertitta’s Golden Nugget Online Gaming (NASDAQ:GNOG) and Rush Street Interactive (NYSE:RSI) went public in late December following SPAC mergers.
However, there’s investor appetite for social casinos and purveyors of free-to-play games, too. Skillz Inc. (NYSE:SKLZ), a mobile gaming and esports provider, joined the ranks of public companies last month following a blank-check deal. That stock is higher by 52 percent over the past month. Playtika (NASDAQ:PLTK), the company behind Bingo Blitz and Caesars Slots, went public via traditional means earlier this month in what is 2021’s largest IPO to date.
Demand for the Playtika offering was oversubscribed and the company now has a market capitalization of nearly $13 billion. That indicates Murren and his partners could be striking while the iron is hot to bring Playstudios to public markets.
“Revenue in the social casino market rose 24% to $7 billion worldwide last year, according to Eilers & Krejcik Gaming LLC, a research firm. Playstudios ranked eighth, with revenue of about $274 million,” reports Bloomberg.
Playstudios’ existing relationship with MGM Resorts is beneficial to users of the platform and could prove to be so for investors.
The company, which makes games such as myVegas Slots and myVegas Blackjack, has its own loyalty program – playAwards. Members of that club can redeem accrued points at venues operated by — you guessed it — MGM.
The program applies to a dozen MGM resorts, including Aria, Bellagio, and Mandalay Bay on the Las Vegas Strip, and points can be used for dining, rooms and other deals, according to Bloomberg.