Games Global Reportedly in Merger Talks with SPAC Tailwind Acquisition
Posted on: March 9, 2022, 11:11h.
Last updated on: March 9, 2022, 01:38h.
Games Global, which describes itself as a supplier to the online gaming industry, is reportedly in merger discussions with special purpose acquisition company (SPAC) Tailwind Acquisition Corp. (NYSE:TWND). Analysts value the combined company at $3 billion.
Games Global was founded last year by CEO Walter Bugno, formerly executive vice president of new business and strategic initiatives at International Game Technology (NYSE:IGT).
Game Global Ltd. is a new supplier to the industry — delivering force and direction to online gaming. Bringing together some of iGaming’s biggest and brightest stars, the Games Global portfolio is home to thousands of titles from 50+ studio partners,” according to the company statement.
Unidentified sources with knowledge of the matter confirmed the talks with Tailwind Acquisition to Bloomberg. But they added formal terms haven’t been set, and it’s possible the deal could fall apart.
Games Global, Tailwind Could Heat Up Gaming SPACs
After a flurry of deals in 2020 and 2021, mergers between blank-check and gaming companies cooled off in the early stages of 2022. One of note is European lottery giant Allwyn Entertainment merging with Cohn Robbins Holdings (NYSE:CRHC) in a transaction carrying an expected enterprise value of $9.3 billion.
An obvious reason why enthusiasm for gaming blank-check deals is waning is because shares of many deSPACed companies in the industry are slumping mightily. For example, DraftKings (NASDAQ:DKNG), Rush Street Interactive (NYSE:RSI), and Skillz (NYSE:SKLZ) — all of which came to market via blank-check mergers — are down an average of 70.75% over the past year.
It remains to be seen if Games Global becomes a public company, and if its treatment in the investment community will be similar to that of other post-SPAC gaming names. The company produces over 3,000 titles across more than 50 studios, including Gameburger Studios, All41 Studios, and Slingshot Studios.
A potential benefit for Games Global is that its areas of focus appear to be iGaming and social casinos, perhaps keeping it away from the costly, ultra-competitive sports wagering space. Additionally, online casinos are forecast to be a larger growth opportunity than regulated sports betting.
Tailwind Trying Again
Tailwind raised $345 million in its initial public offering (IPO) in February 2021. It was close to merging with risk-analytics firm Qomplx, but that deal was scrapped last August.
“The reason for the mutual decision lies with market conditions preventing certain of the closing conditions from being satisfied,” said Tailwind in the aftermath of that transaction collapsing.
It’s not uncommon for blank-check deals to fall apart. But that can put SPACs in a tough spot, because those companies have just two years to find a merger partner or risk liquidation.