FaZe Clan Will Go Public Through a SPAC Merger With B. Riley Principal

Online content and gaming platform FaZe Clan (FAZE) is going public through a SPAC merger with B. Riley Principal 150 Merger Corp. (BRPM). The deal, which gives FaZe Clan an implied pro forma equity value of approximately $1 billion, is expected to close in the first quarter of 2022.

BRPM stock rose 15 percent on Oct. 25 following the merger news. Many people are wondering about FaZe Clan’s stock forecast and how to buy the stock.

In its Feb. 2021 IPO, the BRPM SPAC raised $150 million by offering 15 million shares for $10 each. BRPM is the third SPAC sponsored by an affiliate of B. Riley Financial. The SPAC is led by CEO and CFO Daniel Shribman. B. Riley’s previous two SPACs took Eos Energy Enterprises and Alta Equipment public last year.

According to the deal, FaZe Clan will receive over $291 million in gross cash proceeds to pursue its growth plans. The cash includes $173 million held in trust by BRPM and $118 million in PIPE (private investment in public equity).

In Dec. 2020, FaZe Clan was worth $305 million. BRPM has assigned FaZe Clan a pro forma implied equity value of $987 million and an EV (enterprise value) of $713 million. Based on this, its EV-to-2021 sales multiple is 14.3x, which is steep. Its multiple for 2025 is 1.1x, which seems more reasonable. In comparison, Electronic Arts and Activision Blizzard have next-12-month EV-to-sales multiples of 5.1x and 6.5x, respectively.

Founded in 2010, FaZe Clan is a youth-focused platform that offers online gaming, esports, sports merchandise, and digital content. The company is best known for its teams in Counter-Strike: Global Offensive, Fortnite Battle, Call of Duty, and PlayerUnknown’s Battlegrounds, among others. The company has a large and diversified talent network and ten professional e-sports teams that have won 30 championships. FaZe Clan named League of Legends, Wild Rift, Halo, and Free Fire as potential games for expansion.

FaZe Clan has partnered with major companies, including Verizon Communications, McDonald's, and Doritos, to target millennial and Gen Z consumers. More than 350 million people follow the group through its social media platforms and network of content creators and personalities. FaZe Clan’s existing investors include musicians Offset and Pitbull, NBA stars Ben Simmons and Jamal Murray, and music industry veteran Guy Oseary.

FaZe Clan has projected revenue of $50 million in 2021 and expects it to rise 82 percent year-over-year to $91 million in 2022. The company expects to turn adjusted EBITDA-positive in 2023. In 2025, it foresees revenue of $651 million and adjusted EBITDA of $131 million.

Once the merge is complete, you can buy FaZe Clan shares through any online or traditional broker. The stock is expected to trade under the new ticker symbol "FAZE" on the Nasdaq. If you want to invest right now, you can buy the BRPM SPAC's stock on the Nasdaq.