Murren SPAC Acies Acquisition Trims IPO Size to $200 Million

Posted on: October 22, 2020, 10:07h. 

Last updated on: October 22, 2020, 01:16h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Acies Acquisition Corp. is slashing the size of its upcoming initial public offering (IPO) to $200 million from $300 million. Acies is a special purpose acquisition company (SPAC) backed by former MGM Resorts International (NYSE:MGM) CEO Jim Murren.

Murren SPAC
Former MGM CEO Jim Murren seen earlier this year. His SPAC is reducing the size of its IPO. (Image: Wall Street Journal)

It was revealed last month that Murren, Edward King, and Daniel Fetters are working on a blank-check company that will target transactions in the entertainment, live events, and online gaming industries. King and Fetters are former Morgan Stanley investment bankers.

At that time, it was reported Murren and his partners were aiming to raise $300 million or more via an IPO. But a Wednesday filing with the Securities and Exchange Commission (SEC) indicates that figure is reduced to $200 million.

Blank-check companies have two years to find a target to merge with or the firm must liquidate and return cash to investors.

If we have not consummated an initial business combination within 24 months from the closing of this offering (or 27 months from the closing of this offering if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 24 months from the closing of this offering), we will redeem 100% of the public shares for cash,” according to the Acies filing.

The special purpose vehicle doesn’t mention why the IPO size is being reduced by $100 million. Acies Class A equity will trade on the Nasdaq under the ticker “ACAC,” while its warrants will list on the same exchange under the identifier “ACACW.”

Losing Luster?

In terms of volume, SPAC IPOs are on torrid paces this year, with many of the newly public firms targeting gaming, particularly mobile/social gaming, online casinos, and sports wagering.

“In 2020, SPACs account for virtually all of the growth in the US IPO market vs. 2019 levels. In 2007, the last peak of SPAC IPO volumes, SPACs accounted for 14% of the IPO market vs. nearly 50% of the market in 2020,” according to SPAC Analytics. “This demonstrates that SPACs have gained much larger investor acceptance since its early days.”

However, there are concerns that enthusiasm for blank-check companies is waning, and Acies Acquisition’s reduced IPO size is indicative of that scenario. In recent days, SPACs Cerberus Capital Management, Tekkorp Digital Acquisition, and Yellowstone Acquisition Co. reduced the sizes of their initial offerings, according to Renaissance Capital.

Tekkorp Digital, which has deep ties to the gaming industry, said last month it was looking to raise $300 million in its IPO, but that figure was cut to $250 million.

Time of the Essence

As noted above, Acies or any other SPAC faces the issue of time, meaning it must find a merger partner in two years. Even when a target is found, there are no guarantees a deal will cross the finish line.

Though not the norm, there’s at least one gaming industry example of SPAC scrapping a transaction with a merger partner after a deal was announced. That doesn’t mean Murren’s Acies will face the same fate, but the blank-check firm acknowledges it’s currently not in talks with companies it could partner with.

“We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target,” according to the regulatory filing.