PlayUp to go public via a SPAC in a deal that values firm at $350m
Sports betting operator teams up with IG Acquisition Corp., with an additional fund pledging a $70m investment in business
PlayUp has agreed to a reverse merger with blank check company IG Acquisition Corp (IGAC) – a deal that values the Australia-headquartered operator at $350m.
Details of the agreement appeared on the Securities and Exchange Commission website on Thursday, with both companies investing in a third, newly formed parent company, Maple Grove Holdings Public Limited Company.
The transaction has been unanimously approved by both the board of directors of PlayUp and their opposite numbers at the IGAC.
The $350m valuation is based on last year’s unaudited management accounts for PlayUp compared against PlayUp’s audited statutory accounts for the prior corresponding period. PlayUp’s gross revenue grew 56% year on year during the firm’s financial year 2021/2022.
However, this valuation of the business is significantly less than the $450m cryptocurrency exchange FTX was willing to pay to acquire PlayUp in 2021, according to a lawsuit filed last November.
The merger is expected to close in the first quarter of 2023, pending shareholder approval, as well as regulatory approval in Australia, New Jersey, and Colorado, as well as court approval in Australia.
In addition, an independent expert is required to confirm the transaction is in the best interest of PlayUp’s shareholders. After approval, shares in the newly formed combined group will trade on the Nasdaq.
In tandem with the SPAC arrangement, the newly formed parent company has entered into a $70m standby equity purchase agreement, with a fund managed by New Jersey-based investment firm Yorkville Advisors Global LP.
The extra funding aims to provide additional liquidity as PlayUp says it intends to continue to “aggressively pursue” its expansion strategy in the US and internationally.
As well as New Jersey and Colorado, PlayUp holds online betting licenses in multiple jurisdictions and currently operates in Australia, New Zealand, and India.
“After almost two years of looking at a vast number of industry players, the IGAC team concluded that PlayUp was the company most likely to succeed over the long term,” IGAC said in a statement.
“Given that the hardest part of establishing a global betting product is regulation and licensing, IGAC believes that its principals’ expertise in shaping regulation, combined with PlayUp’s proprietary and advanced platform, creates a compelling partnership.”
Current PlayUp CEO Daniel Simic will retain his title as global CEO of the combined group once the SPAC deal completes, while IGAC chairman Bradley Tusk and IGAC CEO Christian Goode will join the newly merged business.
Tusk will become chairman of the combined company’s board, with Goode in the role of president of PlayUp’s US business.
Addressing the impact of the deal, Simic confirmed it would allow PlayUp to invest in proprietary technology and realise its ambitions to become the “unrivaled entertainment and betting platform” of the future.
“We envision a world where our players can enhance their experience betting on the products they already love plus interact with the next generation of immersive betting products that embrace newer technologies such as AR and VR,” Simic explained.
Formed in 2020, IGAC raised more than $300m in its IPO. It is run by Tusk, a venture capitalist and former New York mayoral campaign manager.
Tusk, who was involved with the campaign of three-term mayor Michael Bloomberg, has also worked with US market leader FanDuel.
Speaking about the potential of the business, IGAC CEO Goode said: “Currently, there is no platform that allows consumers to access every type of betting product through one single sign on. Generally, industry competitors have chosen to focus on one product or another.
“IGAC and PlayUp have the same shared vision: to bring the global online betting industry the most comprehensive suite of traditional and innovative betting products from all over the globe together into one app.
“The transaction is expected to provide PlayUp with access to fresh capital to continue expanding its vision of a true single destination for the future of online betting,” Goode added.