After a disastrous year-plus since going public, FaZe Clan will look to regroup under new ownership.
On Friday, Canadian esports company GameSquare announced it is acquiring FaZe in an all-stock transaction valued at approximately $16 million, per DigiDay. That is an enormous far cry from the $725 million valuation FaZe had when it IPOed in July 2022.
The deal, expected to close in Q4 2023, is being characterized as a merger, with FaZe accounting for 45% of ownership of the new company. The two companies combined for $138 million in revenue and achieved a 26.3% gross margin in 2022.
In a release, GameSquare — backed by Dallas Cowboys owner Jerry Jones via a 2021 acquisition of Jones’ Complexity Gaming — claims that the union gives it the largest social media audience in gaming, with over 1 billion followers. Jones’ Goff & Jones Lending Co. contributed $10 million to make the transaction possible.
Once one of the most promising names in esports, FaZe Clan has experienced a series of harsh economic woes since the Summer of 2022.
The company laid off 40% of its workforce in May after laying off 20% in February. At that time, its stock was trading at 59 cents per share after debuting at $13 per share; as of publishing, the stock is trading at 20 cents per share.
FaZe also reported a $52 million loss in 2022 despite high-profile content deals with the likes of Kyler Murray and Bronny James.