Mobile-Gaming Developer Playstudios Going Public Through Merger

Playstudios has developed mobile Las Vegas-style games like slots and blackjack that don’t offer real-money gambling. The social casino games offer customers real-world rewards in entertainment, shopping and travel through a loyalty program. The company was founded in 2011 by former Wynn Resorts Ltd. WYNN 2.24% executive Andrew Pascal, who is expected to continue leading the combined company.

Talks about the Playstudios deal were first reported by Bloomberg last week.

Several investors including MGM Resorts, BlackRock Inc., BLK 1.70% ClearBridge Investments and Neuberger Berman Funds have agreed to a $250 million investment, the companies said, and the combined company will have an estimated $290 million in cash.

SPACs such as Acies—known as blank-check companies—raise money by going public and have a set period of time to search for an acquisition. The use of SPACs has surged in the past year, including deals around online casinos and sports betting. Overall, U.S-listed SPACs raised $82 billion in 2020, more than all of the money previously raised, according to Dealogic.

With people at home during the pandemic, the global market for social casino games grew 24% from the previous year to nearly $7 billion last year, faster than the overall mobile-gaming growth rate of 18%, according to a report by Eilers and Krejcik Gaming. The firm predicts the social-casino market will reach $8.6 billion by 2025.

Out of the top 15 social casino companies, Playstudios ranked eighth with an estimated $274 million in revenue last year, according to the report.

Playstudios has a history with MGM Resorts leading up to this deal. The casino operator backed Playstudios’ launch, and Playstudios’ reward program includes offerings at MGM’s real-world casinos like meals and hotel rooms on the Las Vegas Strip.

Mr. Pascal said the company’s loyalty program will place the combined company in a strong position as it looks to acquire more games and networks of players and apply its business model.

During the pandemic, Playstudios saw a surge in business, as did other online gaming companies. But with shutdowns of cruises, concerts and other big events used to incentivize customers as rewards, its growth was stunted, he said.

The deal is expected to close in the second quarter. The combined company will be named Playstudios and remain listed on the Nasdaq under the symbol MYPS.

Acies co-chief executives are Dan Fetters and Edward King, former managing directors at Morgan Stanley.

Write to Katherine Sayre at [email protected]