- GameSquare (NDAQ:GAME) has sold a 25.5 per cent interest in FaZe Media for $9.5 million to an entity controlled by FaZe Media’s CEO FaZe Banks
- The sale follows an $11 million investment by Matt Kalish for 49 per cent of FaZe Media that was completed in May 2024
- These transactions value FaZe Media at approximately $40 million and it continues to own 100 per cent of FaZe Esports
- GameSquare last traded at US$1.12 per share
GameSquare (NDAQ:GAME) has sold a 25.5 per cent interest in FaZe Media for $9.5 million to an entity controlled by FaZe Media’s CEO FaZe Banks.
The sale follows an $11 million investment by Matt Kalish for 49 per cent of FaZe Media that was completed in May 2024. The Media and technology company says these transactions value FaZe Media at approximately $40 million and it continues to own 100 per cent of FaZe Esports. It also holds a controlling voting interest in FaZe Media, and will continue to consolidate FaZe Media’s financial results in its financial statements.
“Since completing the acquisition of FaZe Clan in March 2024 our strategy has been focused on reigniting the FaZe brand by returning its founders in a meaningful way,” GameSquare CEO Justin Kenna said in a news release. “With the support of Matt Kalish and his direct investment in FaZe Media, we structured the new business as a creator-led IP and media company. Today’s announcement solidifies this approach by providing access to a significant stake in the business and aligning FaZe’s founders in the success of the brand.”
An entity controlled by FaZe Media’s CEO, FaZe Banks, acquired a 25.5 per cent stake in FaZe Media from GameSquare at $1.66 per share, totaling $9.5 million. GameSquare plans to use the transaction proceeds to invest in growth and support working capital needs. After the transaction, GameSquare retains a 25.5 per cent ownership in FaZe Media. However, the purchaser has the option to buy up to 3,230,556 additional shares of FaZe Media from GameSquare at fair market value, but not less than $2 per share. According to the transaction terms, GameSquare will maintain voting control of the transferred shares for two years, during which FaZe Media will remain consolidated in GameSquare’s financial statements.
As part of the agreement, GameSquare will continue to provide certain corporate and agency services to FaZe Media.
FaZe Media had revenue of $30.0 million for the 12 months ending March 31, 2024. For that same period, FaZe Esports had revenue of $11.3 million and it will still be under total ownership of GameSquare.
Transaction history:
- In December 2023, GameSquare sold non-core radio business assets for $3.4 million at a valuation of approximately 1.8x trailing 12-month revenue
- In March 2024, it sold Complexity Gaming for total consideration of $10.4 million at a valuation of approximately 1.0x trailing 12-month revenue
- In May 2024, closed an $11 million investment into FaZe Media from Matt Kalish funding FaZe Media’s business
- In June 2024, sold non-core content management software and PR distribution assets for a total consideration of $2.2 million at a valuation of approximately 1.4x trailing 12-month revenue
GameSquare Holdings is an international gaming and esports company with headquarters in Toronto.
GameSquare stock closed 4.67 per cent higher, last trading at US$1.12 per share.
Join the discussion: Find out what everybody’s saying about this stock on the GameSquare Holdings Inc. Bullboard investor discussion forum, and check out the rest of Stockhouse’s stock forums and message boards.
The material provided in this article is for information only and should not be treated as investment advice. For full disclaimer information, please click here
(Top image: GameSquare Holdings)