Proceeds to accelerate Jam City’s proven
growth strategy, including acquisition of leading Montreal-based
mobile game publisher Ludia, Inc.
The transaction values the combined company
at an enterprise value of $1.2 billion, and proceeds are expected
to support future M&A and other strategic initiatives with the
expected addition of approximately $115 million of cash to the
combined company’s balance sheet, including from a committed PIPE
of $100 million
Combined company expects to generate $868
million in bookings and $112 million in Adjusted EBITDA in 2022,
representing 2019 - 2022E CAGRs of 23% and 30%,
respectively
Chris DeWolfe, Chairman & CEO, and Josh
Yguado, President & COO, will continue to lead the company and
the transaction includes addition of multiple well-regarded new
Board members including former BET, Viacom, and Microsoft executive
Denmark West
Investor call scheduled for May 20, 2021 at
8:30 a.m. ET
Jam City, Inc. (“Jam City”), a leading mobile entertainment
company behind some of the world’s highest grossing and most
enduring mobile games, and DPCM Capital, Inc. (“DPCM Capital”)
(NYSE: XPOA), a publicly traded special purpose acquisition company
led by Emil Michael, today announced that they have entered into a
definitive merger agreement that will result in Jam City becoming a
publicly listed company. The transaction values the combined
company at an enterprise value of $1.2 billion. Upon closing, the
combined company will operate as Jam City Holdings, Inc. and its
Class A common stock is expected to be listed on the New York Stock
Exchange under the ticker symbol “JAM”.
In conjunction with the closing of the business combination, Jam
City will use the cash proceeds to acquire a leading Montreal-based
mobile game publisher Ludia, Inc. (“Ludia”) from FremantleMedia
Canada Inc. (“Fremantle”), bringing together two highly creative
leaders in mobile gaming and further strengthening Jam City’s
market position and global player network. The combined company’s
well-balanced, diversified portfolio of critically acclaimed, top
grossing games is expected to include Harry Potter: Hogwarts
Mystery; Cookie Jam; Panda Pop; and Jurassic World Alive. It is
also expected to benefit from a strong pipeline of tentpole owned
and licensed game releases with leading brands such as DC, and some
of Disney’s biggest brands, which are expected to accelerate
organic growth for the next several years.
“We have built and are scaling one of the world’s leading mobile
entertainment platforms by bringing art – including storylines,
characters and game mechanics – together with a powerful technology
platform that leverages data to drive user acquisition and live
game operations,” said Chris DeWolfe, Chairman and Chief Executive
Officer of Jam City. “We expect going public will provide us with a
source of capital to accelerate our growth and advance our
strategic priorities, while acquiring and teaming up with Ludia
adds compelling new intellectual property and gaming genres to our
catalog. Together, we believe these transactions will advance our
vision to create premium, social mobile games that are an enduring
part of our players’ lives.”
The combined company will be led by Chris DeWolfe and the rest
of Jam City’s highly experienced management team including
co-Founder, President and Chief Operating Officer Josh Yguado, and
Chief Financial Officer Jae Yu. Denmark West, founding partner and
Chief Investment Officer of Connectivity Ventures and former
executive at BET, Viacom Media Networks and Microsoft, will join
the combined company’s Board of Directors. Existing Jam City
stockholders are expected to own approximately 65% of the
outstanding shares of Class A common stock of the combined company
at close, assuming no redemptions by DPCM Capital stockholders.
Netmarble Corporation (“Netmarble”), Jam City’s valued strategic
investor, will own a significant portion of the combined
company.
A group of leading institutional investors, along with
Netmarble, DPCM’s sponsor, and members of the combined company
management teams have committed to a private investment of $100
million in Class A common stock of the combined company that will
close concurrently with the business combination and, subject to
any redemptions by DPCM Capital’s shareholders, there is
approximately $300 million currently held in DPCM Capital’s trust
account. Proceeds from the transaction will be used to finance the
$175 million acquisition of Ludia from Fremantle, provide liquidity
to an early investor, and pay fees and expenses associated with the
transaction. It is expected that the combined company will have
approximately $115 million of cash on its balance sheet, which is
anticipated to be used to accelerate growth by introducing new
games that appeal to broad global audiences, continuing to enhance
its proprietary technology, and pursuing future M&A
opportunities and other strategic initiatives.
“We believe our central technology platform, Jam City Live, is
what sets us apart and provides us with a sustainable competitive
advantage by driving performance and growth to create enduring
franchises,” said Yguado. “We believe that games are the
next-generation of social engagement, and that our longstanding
relationships throughout the global gaming ecosystem provide us
access to a rich pipeline of untapped, accretive growth
opportunities that we are poised to capitalize on.”
“We believe Jam City is at the forefront of mobile gaming, and
its unique Games-as-a-Service model has proven to sustain player
retention and drive monetization,” said Emil Michael, Chairman and
CEO of DPCM Capital. “We are proud to partner with Chris, Josh and
the team in their efforts to continue Jam City’s growth and further
define the company as a category-defining entertainment brand.”
Combined Company Overview
As a well-capitalized leader in mobile entertainment, we believe
Jam City is uniquely positioned to capitalize on the large,
fast-growing global mobile gaming market, a market which includes
more than 2.7 billion players and that is expected to exceed $205
billion in revenue by 2023, according to Newzoo.
Jam City benefits from a world-class talent base, a global
studio network and a proprietary technology platform that enables
it to consistently deliver deep, rich and engaging mobile
entertainment experiences that appeal to fans around the world. In
addition to introducing new game franchises, Jam City has fueled
growth through a successful and scalable M&A strategy that
involves acquiring assets and studios that have created deep
entertainment experiences and leveraging Jam City Live to improve
game performance.
With the addition of Ludia, Jam City’s game portfolio will
include seven forever franchises, which it considers its most
enduring games with at least $100 million in lifetime bookings and
receive ongoing Jam City support. Our forever franchises are
anticipated to include Cookie Jam; Panda Pop; Genies & Gems;
Harry Potter: Hogwarts Mystery; Bingo Pop; Disney Emoji Blitz1; and
Jurassic World games (Jurassic World: The Game, Jurassic World
Alive).2 These franchises are diversified across game genres and
types of intellectual property, with no single game contributing
more than 20% of Jam City’s and Ludia’s combined $570 million total
bookings in 2020. By leveraging its strengths to improve
performance across Ludia’s portfolio, Jam City expects to generate
$868 million in bookings and $112 million in Adjusted EBITDA in
2022, representing 23% and 30% CAGRs, respectively, from 2019 to
2022E.
“Joining forces with Jam City enables us to leverage their
technology platform to further enhance performance across our
portfolio and collaborate on exciting new projects,” said Alex
Thabet, President and Chief Executive Officer of Ludia. “This
combination is expected to benefit our collective stakeholders and
create new avenues for sustained growth.”
In 2020, Jam City was a top 10-featured game publisher in the
U.S. across the App Store and Google Play. Together with Ludia, Jam
City has built an engaged global player network of 31 million
monthly active users and 1.3 billion cumulative game installs as of
fourth quarter of 2020. Jam City and Ludia also generated a
combined 3 billion total hours played and 9 billion advertising
impressions last year.
Key Transaction Terms
The boards of directors of Jam City and DPCM Capital have
approved the business combination. The transaction will require the
approval of the stockholders of both Jam City and DPCM Capital, and
is subject to other customary closing conditions, including the
receipt of certain regulatory approvals. The transaction is
expected to close sometime later this year. The acquisition of
Ludia will be effected pursuant to the terms and conditions of the
transaction agreement entered into by Jam City and Ludia, which
contains customary closing conditions.
The Raine Group (“Raine”) is acting as lead financial advisor
and Fenwick & West LLP is acting as legal advisor to Jam City,
and Paul Hastings LLP is acting as legal advisor to Netmarble. UBS
Securities LLC (“UBS”) is acting as lead financial and capital
markets advisor and Greenberg Traurig, LLP is acting as legal
advisor to DPCM Capital. UBS and Raine are acting as placement
agents on the private placement.
Investor Conference Call Information
Jam City and DPCM Capital will host a joint investor conference
call to discuss the proposed transaction on May 20, 2021 at 8:30
a.m. EDT.
To listen to the prepared remarks via telephone dial
1-877-407-9208 (U.S.) or 1-201-493-6784 (International) and an
operator will assist you. A telephone replay will be available at
1-844-512-2921 (U.S.) or 1-412-317-6671 (International), passcode:
13719988 through May 27, 2021. A webcast replay will be available
at http://public.viavid.com/index.php?id=145037 through November
20, 2021.
An investor presentation detailing the transaction will be
available at www.dpcmcapital.com. It will also be filed with the
SEC as an exhibit to a Current Report on Form 8-K, and available on
the SEC website at www.sec.gov.
About Jam City
Jam City is an award-winning mobile entertainment company
providing unique and deeply engaging games that appeal to a broad,
global audience. Led by CEO Chris DeWolfe, former MySpace
co-founder and CEO, and COO Josh Yguado, former 20th Century Fox
executive, Jam City is the creative powerhouse behind some of the
highest-grossing and most enduring mobile games. Jam City’s global
franchise Cookie Jam has generated $790 million in lifetime
bookings and Panda Pop has generated $375 million in lifetime
bookings as of Q4 2020. The company is a partner of choice for
Hollywood studios, having developed immersive, narrative-rich
mobile games around iconic entertainment brands. The company’s
popular RPG game Harry Potter: Hogwarts Mystery was the #1 game in
more than 40 countries at its launch in April 2018. Jam City
currently has studios and talent located in Los Angeles (HQ),
Burbank, Cedar Falls, Las Vegas, San Diego, San Francisco and,
internationally, in Berlin, Bogotá, Buenos Aires, and Toronto. For
more information, please visit www.jamcity.com.
About DPCM Capital, Inc.
DPCM Capital, Inc. is a special purpose acquisition company led
by Chairman and CEO Emil Michael, formed for the purpose of
effecting a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization, or similar business combination
with one or more businesses. UBS Securities LLC acted as sole
book-running manager for DPCM Capital’s initial public offering.
Its common stock, units, and warrants began trading on the NYSE on
October 23, 2020 under the ticker symbols XPOA, XPOA.U and XPOA WS,
respectively. www.dpcmcapital.com
About Ludia, Inc.
Ludia Inc. is one of Canada's leading mobile video game
companies. Its high-quality portfolio includes original games based
on internationally recognized brands such as Jurassic World Alive.
DreamWorks Dragons: Titan Uprising, Warriors of Waterdeep,
Lovelink, Jurassic World: The Game, Teenage Mutant Ninja Turtles:
Legends, DreamWorks Dragons: Rise of Berk, and much more. The
development studio welcomes almost 400 dynamic and bright crew
members. Awarded “Canada’s Best Game Maker” by Apple, Ludia was
also recognized for “Best Place to Work 2018” by gamesindustry.biz
and “Montreal’s Top Employers 2021”. For more information, visit
ludia.com, our Facebook page Facebook/LudiaGames, LinkedIn/Ludia or
Twitter/LudiaGames. For more information, please visit
www.ludia.com. In 2009, Fremantle acquired an initial stake of 30%
per cent in Ludia and increased its shareholding to 100 per cent
between 2012 and 2014.
About Netmarble Corporation
Established in Korea in 2000, Netmarble Corporation is a top
developer and publisher pushing the boundaries of the mobile gaming
experience with highly innovative games including Lineage 2:
Revolution, The Seven Deadly Sins: Grand Cross, Blade & Soul
Revolution and MARVEL Future Fight. As a parent company of Kabam,
and a major shareholder of Jam City and HYBE (formerly Big Hit
Entertainment), Netmarble strives to entertain audiences around the
world with a variety of mobile games based on its powerful
franchises and collaborations with IP holders worldwide. More
information can be found at http://company.netmarble.com.
Additional Information and Where to Find It
In connection with the proposed business combination and related
transactions contemplated in connection therewith (the “Proposed
Transaction”), DPCM Capital, Inc. (“DPCM Capital”) intends to file
with the Securities and Exchange Commission (“SEC”) a registration
statement on Form S-4 containing a preliminary proxy
statement/prospectus of DPCM Capital and consent solicitation
statement of Jam City, Inc. (“Jam City”), and after the
registration statement is declared effective, DPCM Capital and Jam
City will mail a definitive proxy statement/prospectus/consent
solicitation statement relating to the Proposed Transaction to
their respective stockholders. This press release does not contain
any information that should be considered by DPCM Capital’s or Jam
City’s stockholders concerning the Proposed Transaction and is not
intended to constitute the basis of any voting or investment
decision in respect of the Proposed Transaction or the securities
of DPCM Capital. DPCM Capital’s and Jam City’s stockholders and
other interested persons are advised to read, when available, the
preliminary proxy statement/prospectus/consent solicitation
statement and the amendments thereto and the definitive proxy
statement/prospectus/consent solicitation statement and other
documents filed in connection with the Proposed Transaction, as
these materials will contain important information about DPCM
Capital, Jam City, Ludia, Inc. (“Ludia”) and the Proposed
Transaction. When available, the definitive proxy
statement/prospectus/consent solicitation statement and other
relevant materials for the Proposed Transaction will be mailed to
stockholders of DPCM Capital and Jam City as of a record date to be
established for voting on the Proposed Transaction. Stockholders
will also be able to obtain copies of the preliminary proxy
statement/prospectus/consent solicitation statement, the definitive
proxy statement/ prospectus/consent solicitation statement and
other documents filed with the SEC, without charge, once available,
at the SEC’s website at www.sec.gov, or by directing a request to:
DPCM Capital, Inc., 382 NE 191 Street, #24148, Miami, FL 33179.
No Offer or Solicitation
This press release shall not constitute a “solicitation” as
defined in Section 14 of the Securities Exchange Act of 1934, as
amended. This press release does not constitute an offer, or a
solicitation of an offer, to buy or sell any securities, investment
or other specific product, or a solicitation of any vote or
approval, nor shall there be any sale of securities, investment or
other specific product in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such
jurisdiction.
Participants in Solicitation
DPCM Capital, Jam City and their respective directors and
executive officers may be deemed participants in the solicitation
of proxies from DPCM Capital’s stockholders with respect to the
Proposed Transaction. A list of the names of DPCM Capital’s
directors and executive officers and a description of their
interests in DPCM Capital is contained in DPCM Capital’s Annual
Report on Form 10-K, filed with the SEC on March 31, 2021, which is
available free of charge at the SEC’s web site at www.sec.gov, or
by directing a request to DPCM Capital, Inc., 382 NE 191 Street,
#24148, Miami, FL 33179. Additional information regarding the
interests of the participants in the solicitation of proxies from
DPCM Capital’s stockholders with respect to the Proposed
Transaction will be contained in the proxy statement/prospectus for
the Proposed Transaction when available.
Cautionary Statement Regarding Forward-Looking
Statements
Certain statements in this press release may be considered
“forward-looking statements” within the meaning of the “safe
harbor” provisions of the U.S. Private Securities Litigation Reform
Act of 1995. Forward-looking statements herein generally relate to
future events or the future financial or operating performance of
DPCM Capital, Jam City, Ludia or the combined company expected to
result from the Proposed Transaction (the “Combined Company”). For
example, projections of future financial performance of Jam City,
Ludia and the Combined Company, expected release dates for games,
the business combination of Jam City and Ludia, Jam City’s ability
to leverage its strengths to maximize Ludia’s long-term potential,
the Combined Company’s business plan, Jam City’s ability to
continue its M&A strategy, other projections concerning key
performance metrics, the proceeds of the Proposed Transaction and
the Combined Company’s expected cash runway, and the potential
effects of the Proposed Transaction on DPCM Capital and the
Combined Company, are forward-looking statements. In some cases,
you can identify forward-looking statements by terminology such as
“may,” “ should,” “expect,” “ intend,” “ will,” “estimate,” “
anticipate,” “ believe,” “ predict,” “project,” “target,” “plan,”
or “potentially” or the negatives of these terms or variations of
them or similar terminology. Such forward-looking statements are
subject to risks, uncertainties, and other factors which could
cause actual results to differ materially from those expressed or
implied by such forward-looking statements.
These forward-looking statements are based upon estimates and
assumptions that, while considered reasonable by DPCM Capital, Jam
City and its management, as the case may be, are inherently
uncertain and subject to material change. New risks and
uncertainties may emerge from time to time, and it is not possible
to predict all risk and uncertainties. Factors that may cause
actual results to differ materially from current expectations
include, but are not limited to, various factors beyond
management’s control, including general economic conditions and
other risks, uncertainties and factors set forth in the section
entitled “Risk Factors” and “Cautionary Note Regarding
Forward-Looking Statements” in DPCM Capital’s Annual Report on Form
10-K, filed with the SEC on March 31, 2021, and other filings with
the SEC, as well as factors associated with companies, such as Jam
City, that are engaged in the business of mobile game development
and publishing, including anticipated trends, growth rates, and
challenges in those businesses and in the markets in which they
operate, including the factors described in the summary risk
factors that will accompany the investor presentation;
macroeconomic conditions related to the global COVID-19 pandemic;
our ability to integrate Jam City’s and Ludia’s business
operations; intense competition in the broader entertainment
industry and the ability of Jam City’s and Ludia’s games to compete
with other forms of entertainment; adverse changes to Jam City’s
and Ludia’s relationships with platforms like the Apple App Store
or Google Play Store; our history of net losses, and quarterly and
annual fluctuations in our operating results, including net
income/loss, where such fluctuations are due to a number of
factors, including, but not limited to (i) the timing of contingent
consideration payments in connection with acquisitions; (ii)
fluctuations in operating expenses, such as sales and marketing;
(iii) incremental amortization expenses from acquisitions (which we
expect to occur in the case of Jam City’s acquisition of Ludia);
and (iv) stock-based compensation charges related to equity grants
(which may result from the Proposed Transaction in connection with
DPCM Capital's existing warrants and any related earnout payments);
adverse changes to the terms of third-party platforms and
advertising channels, which may be unilateral; our ability to
develop and launch new games, enhance existing franchises and
evolve games into successful franchises; delays in game launches;
our free-to-play business model and resulting reliance on a small
portion of our users for substantially all our revenues from in-app
transactions; adverse changes in our relationships with third-party
licensors; disruptions of services; data privacy or data security
breaches; adverse changes in the legal and regulatory regimes
applicable to Jam City and Ludia; the failure to realize the
anticipated benefits of the Proposed Transaction; Jam City’s
current equityholders’ anticipated significant ownership and voting
control of the Combined Company; the amount of redemption requests
made by DPCM Capital’s public stockholders; DPCM Capital’s ability
to procure private placement subscriptions in connection with the
Proposed Transaction sufficient to satisfy Jam City’s business
objectives. Nothing in this press release should be regarded as a
representation by any person that the forward-looking statements
set forth herein will be achieved or that any of the contemplated
results of such forward-looking statements will be achieved. You
should not place undue reliance on forward-looking statements in
this press release, which speak only as of the date they are made
and are qualified in their entirety by reference to the cautionary
statements herein. Nothing in this press release should be regarded
as a representation by any person that the forward-looking
statements set forth herein will be achieved or that any of the
contemplated results of such forward-looking statements will be
achieved. You should not place undue reliance on forward-looking
statements in this press release, which speak only as of the date
they are made and are qualified in their entirety by reference to
the cautionary statements herein and the risk factors of DPCM
Capital, Jam City and FremantleMedia Canada Inc. (“Fremantle”)
described above. Neither Jam City nor DPCM Capital undertakes any
duty to update these forward-looking statements.
This press release contains projected financial information with
respect to Jam City and Ludia. Such projected financial information
constitutes forward-looking information, is for illustrative
purposes only and should not be relied upon as being predictive of
future results. The assumptions and estimates underlying such
financial forecast information are inherently uncertain and are
subject to a wide variety of significant business, economic,
competitive and other risks and uncertainties that could cause
actual results to differ materially from those contained in such
prospective financial information, including without limitation,
assumptions regarding DPCM Capital’s and Jam City’s ability to
consummate the Proposed Transaction, Jam City’s ability to complete
its acquisition of Ludia, Jam City’s ability to realize synergies
from its acquisition of Ludia, the Combined Company’s anticipated
game releases on the estimated timelines and the results or
benefits to be realized from such game releases, the failure of any
of which to materialize could cause actual results to differ
materially from those contained in the prospective financial
information. Jam City and DPCM Capital caution that their
assumptions may not materialize and that current economic
conditions render such assumptions, although believed reasonable at
the time they were made, subject to greater uncertainty. See the
section above titled “Forward-Looking Statements”. The inclusion of
financial forecast information in this press release should not be
regarded as a representation by any person that the results
reflected in such forecasts will be achieved. Neither DPCM
Capital’s, Jam City’s nor Ludia’s independent auditors have
audited, reviewed, compiled or performed any procedures with
respect to the projections for the purpose of their inclusion in
this press release or any other purpose, and accordingly, none of
such independent auditors has expressed any opinion or provided any
other form of assurance with respect to such projections.
__________________________ 1 “Jam City’s rights to Disney Emoji
Blitz are not perpetual.” 2 “The rights to Jurassic World games are
not perpetual.”
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210520005374/en/
For Jam City PR: Jason Chudoba or Megan Kivlehan
JamCityPR@icrinc.com
For Jam City IR: JamCityIR@icrinc.com
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