GameSquare's Epic Acquisition: Taking FaZe Clan Back to the Summit!

On October 20, GameSquare made a significant announcement, revealing a "definitive agreement" for their acquisition of FaZe Clan in an all-stock transaction.

FaZe Clan ventured into the public market in 2022, but their Nasdaq journey was far from smooth, as they struggled to maintain a share price above the crucial $1 mark required to remain listed on the exchange.

What's particularly noteworthy about GameSquare's takeover is that it will restore FaZe Clan's founding members to prominent leadership positions, including:

• Richard “FaZe Banks” Bengtson as the CEO of FaZe Clan, which will function as a wholly owned subsidiary and an independent division of GameSquare.
• Thomas “FaZe Temperrr” Oliveira as the President of FaZe Clan.
• Yousef “FaZe Apex” Abdelfattah as the COO of FaZe Clan.

Christoph Pachler, Interim CEO of FaZe Clan, emphasized the significance of this union, stating, "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."

FaZe Clan's long-standing CEO, Lee Trink, stepped down from his role in September, reportedly as part of the deal.

If the deal were to close today, the estimated value of FaZe Clan's stock is around $16 million, according to DigiDay.

GameSquare, in addition to this acquisition, is the owner of competing esports brand Complexity Gaming and Code Red Esports, a talent agency.

Justin Kenna, CEO of GameSquare, highlighted the significance of the gaming community and the potential of the acquisition: "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."

Speaking of the founders, one of the main critiques of FaZe Clan's recent direction was the diminished involvement of the original founding members and prior owners.

Now, with Banks taking the helm as CEO, there's renewed confidence. "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," Banks declared. "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."

Furthermore, GameSquare's management foresees saving approximately $18 million in current expenditure by reducing corporate costs and enhancing efficiency across the organization.

The joint revenue of FaZe Clan and GameSquare for 2022 reached approximately $138 million, a notable achievement.

The transaction is slated to conclude in the fourth quarter of 2023, pending shareholder approval. In the merged entity, current GameSquare shareholders will hold around 55%, with FaZe Clan shareholders possessing approximately 45%.