North American esports and entertainment company GameSquare has agreed to acquire US gaming, lifestyle and esports organisation FaZe Clan in an all-stock transaction.
The transaction is expected to be closed in Q4 2023, with FaZe Clan founders returning to lead the brand in the future. Both GameSquare and FaZe Clan are publicly traded on the NASDAQ stock exchange.
FaZe Clan went public in the July 2022 in a deal that attracted major media attention and mainstream headlines. Initially claiming a valuation of over a billion dollars, the company’s stock however went on to decline dramatically, reaching a low of around 18 US cents at the time of writing.
The Boards of both FaZe Clan and GameSquare have unanimously approved the merger. The transaction is slated to close in Q4 2023, though it is subject to approval by FaZe Clan and GameSquare shareholders, regulatory approval — and the completion of a ‘private placement’. GameSquare will pursue a private placement in public equity with institutional investors to raise $10m through the sale of GameSquare stock.
Digiday reported that if the deal were to close at the companies’ current market capitalisations, it would value FaZe Clan at approximately $16m (~£13.2m). The acquisition was first hinted at in a July 2023 report from Sports Business Journal
The merger will also see the “return FaZe Clan’s founders to lead the brand and reestablish authenticity,” FaZe said in a release.
Richard ‘FaZe Banks’ Bengston will be appointed CEO of FaZe Clan. Thomas ‘FaZe Temperrr’ Oliveira will be the President and Yousef ‘FaZe Apex’ will act as the COO of the company after the merger.
It comes after FaZe Clan has faced a myriad of controversies involving its high-profile content creators, which the company cited as a reason for its $14m (~£11.27m) loss in Q2 2023.
GameSquare and FaZe noted that the merger creates one of the largest platforms connected to esports, gaming and youth culture in the world, with FaZe’s creators, esports brands and personnel joining Gamesquare’s large roster of companies and brands. This includes esports agency Code Red, esports organisation Complexity Gaming, Stream Hatchet, Fourth Frame Studios and others.
With this merger, GameSquare becomes one of the largest esports holding companies in the world, serving a multi-million audience across all major markets and esports titles. The acquisition comes amid major financial woes for FaZe Clan. It remains to be seen what moves will GameSquare make to optimise the notoriously expensive FaZe Clan operations.
