PLAYSTUDIOS, Inc. current report, 01 February 2021

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PLAYSTUDIOS, Inc. Transaction Summary

Filing and period: Form 8-K filed by Acies Acquisition Corp. on February 2, 2021, reporting events beginning February 1, 2021. The filing concerns Acies’ proposed business combination with PlayStudios, Inc.; it does not report PlayStudios’ operating results for a fiscal reporting period.

Business Context

  • Acies, a Cayman Islands blank-check company, entered into a merger agreement with PlayStudios and two wholly owned merger subsidiaries.
  • The proposed transaction would combine Acies and PlayStudios, with the post-closing company referred to as New PlayStudios.
  • Before closing, Acies would domesticate from the Cayman Islands to Delaware. Existing Acies securities would convert into corresponding New PlayStudios securities.

Transaction Economics and Key Financial Metrics

  • The merger consideration values PlayStudios at approximately $1.041 billion, subject to the agreement’s capitalization and adjustment mechanics.
  • PlayStudios shareholders may elect cash for up to 15% of their shares, subject to an aggregate available cash consideration of no more than $150 million and possible proration.
  • Shares not exchanged for cash generally would convert into New PlayStudios Class A Common Stock at a reference price of $10.00 per share. Founder Group holdings would generally convert into Class B Common Stock with 20 votes per share and equivalent economic terms.
  • Eligible PlayStudios shareholders and option holders may receive rights to an aggregate of up to 15 million earnout shares, contingent on specified share-price milestones.
  • PIPE investors subscribed for 25 million New PlayStudios Class A shares for aggregate proceeds of $250 million, or $10.00 per share, subject to closing conditions.
  • PlayStudios’ financial statements, revenue, profit, cash flow, margins, debt, and liquidity balances are not provided in the filing text.

Material Changes and Agreements

  • The transaction was newly announced and remained subject to shareholder approvals, regulatory clearances, effectiveness of an S-4 registration statement, Nasdaq listing approval, and other customary closing conditions.
  • PlayStudios’ closing condition requires at least $200 million of combined available trust-account cash and PIPE proceeds, after specified deductions and subject to qualified transaction expenses.
  • Acies’ sponsor agreed to vote in favor of the transaction and to forfeit or subject certain founder shares and private-placement warrants to forfeiture. Sponsor and director securities are generally subject to transfer restrictions for 12 months after closing, with limited release after 180 days.
  • Key PlayStudios stockholders agreed to support the transaction. Their covered shares represented a majority of specified PlayStudios voting interests.
  • New PlayStudios would provide registration rights for certain PIPE and other investors’ securities. Lockup restrictions would generally apply for 12 months after closing, with limited release after 180 days.

Outlook, Risks, and Contingencies

  • The merger agreement could be terminated if closing does not occur by August 15, 2021, subject to the agreement’s provisions, or if required approvals are not obtained or other termination conditions arise. The PIPE agreements would terminate if the merger agreement terminates or if closing has not occurred by August 16, 2021.
  • Key risks include shareholder redemptions reducing trust-account proceeds, failure to complete the PIPE financing, inability to satisfy the $200 million minimum funding condition, regulatory or Nasdaq approval issues, litigation, transaction costs, and failure to realize anticipated benefits.
  • The filing identifies additional risks related to COVID-19, competition and regulation, disruption to PlayStudios’ operations, future financing needs, restrictive debt covenants, changes in capital structure, and the accuracy of forecasts or estimated redemption levels.
  • The filing contains forward-looking statements but provides no clear operating guidance or reliable forecast figures in the supplied text.

Investor Verification Checklist

  • Verify the final merger consideration, capitalization, cash-election allocation, and earnout milestones in the definitive merger agreement and subsequent proxy/prospectus.
  • Confirm the amount remaining in Acies’ trust account after shareholder redemptions and transaction expenses.
  • Confirm whether the $250 million PIPE investment closed and whether the $200 million minimum funding condition was satisfied.
  • Review PlayStudios’ audited financial statements, revenue growth, profitability, cash flow, debt, liquidity, and customer or platform concentration in the S-4 and subsequent filings.
  • Assess the voting-control implications of the founder’s Class B shares, including the 20-to-1 voting structure and sunset provisions.
  • Confirm completion of shareholder approvals, regulatory review, domestication, Nasdaq listing, and the closing date.