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Faze Clan moves closer to going public after SEC approval

Esports organisation agreed to SPAC merger with BRPM last October.

27 June 2022 Ed Dixon

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  • Faze Clan and BRPM missed initial Q1 2022 deal deadline
  • Merger still requires approval from BRPM shareholders, as well as satisfying closing conditions
  • Deal now needs to be completed by 25th July

Esports giant Faze Clan has edged closer to going public via a merger with a special purpose acquisition company (SPAC) after getting approval from the US securities and exchange commission (SEC).

Faze Clan announced plans to go public last October through a merger with B. Riley Principal 150 Merger Corp (BRPM) which valued the combined entity at US$1 billion.

The deal had initially been expected to conclude in the first quarter of 2022, but after missing that deadline there were fears the arrangement would be derailed. In the agreement, BRPM would rename as ‘Faze Holdings Inc.’ Faze Clan’s existing shareholders would own 68 per cent of the company, trading as ‘FAZE’ on the Nasdaq.

The merger would also give Faze Clan the highest valuation ever for an esports company.

Though the SEC approval has got things back on track, a deal to go public still requires approval from BRPM shareholders during a special meeting on 15th July. According to Sports Business Journal (SBJ), if that hurdle is cleared the deal is expected to close shortly after the meeting, as it must be completed by 25th July.

In addition, Faze Clan and BRPM must satisfy all closing conditions for the merger to be realised, including retaining enough funds in BRPM’s trust account after its shareholders get the option to withdraw their investment during the special meeting. 

In April, BRPM submitted an amended filing to the SEC showing that Faze Clan posted an adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) loss of US$28.7 million for 2021, compared to a projected loss of US$19 million. Revenue stood at US$52.9 million, exceeding a forecast of US$50 million.

Despite the bottom line being worse than expected, Faze Clan was still ranked by Forbes this year as the fourth most valuable esports organisation with an estimated valuation of US$400 million.

Founded in 2010, Faze Clan has more than ten esports teams competing in the likes of Call of Duty, Fortnite and Rocket League.

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