The First Mobile Esports Platform to Go Public,
Delivering Fair, Fun & Meaningful Competition (NYSE: FEAC)
- Investors including Wellington, Fidelity, Franklin Templeton,
and Neuberger Berman funds have committed to a $159 million PIPE
with total commitments exceeding $250 million.
- High growth business with projected 2022 revenue of $555
million, a 57% CAGR from 2020
- Andrew Paradise, CEO & Founder of Skillz, and Casey
Chafkin, CRO and Founder of Skillz, will continue to lead the
company
- Existing Skillz stockholders and Flying Eagle sponsor agree to
24-month lock-up
- Investor call scheduled for September 2, 2020
Skillz Inc., (“Skillz”) a leading mobile games platform
connecting players in fair, fun, and meaningful competition, and
Flying Eagle Acquisition Corp. (NYSE: FEAC) (“Flying Eagle”), a
publicly-traded special purpose acquisition company, agreed
yesterday to a business combination that will result in Skillz
becoming a publicly-listed company.
Skillz is pioneering the competitive mobile gaming experience,
powering tournaments for thousands of game developers around the
world, expanding and leading growth in the mobile gaming market. It
is anticipated that in 2020, Skillz’s patented technology will
power over two billion casual esports tournaments and facilitate
$1.6 billion in paid entry fees for games hosted on its secure and
proprietary platform.
The gaming industry is larger than movies, music, and books,
with more than 2.7 billion gamers playing monthly and 10 million
developers worldwide. Mobile is the fastest-growing segment of the
gaming market, expected to increase from $68 billion last year to
$150 billion in 2025 (according to Newzoo and GlobalData).
“Today we’re a leader in casual esports and are well positioned
to capture the global esports opportunity which will increasingly
define the gaming market,” said Andrew Paradise, CEO and Founder of
Skillz. “Skillz fulfills the human desire for community and
competition and is shaping the future of interactive
entertainment.”
“I’ve been active in the evolution of gaming for 20 years, from
ZeniMax to DraftKings, and I believe Skillz has positioned itself
as the platform for the future of gaming, where entertainment,
gaming, and enablement converge,” said Flying Eagle Chairman and
CEO, Harry E. Sloan.
Sloan’s involvement in the video game business dates back to
1999 when he was a founding investor and board member of ZeniMax
Media Inc., the award-winning creator and publisher of interactive
entertainment and its Bethesda Game Studio. Sloan is partnered on
Flying Eagle with Jeff Sagansky and Eli Baker, who together took
DraftKings (Nasdaq: DKNG) public in April 2020.
Skillz has earned recognition as one of Fast Company’s Most
Innovative Companies, a two-time winner of CNBC’s Disruptor 50,
Forbes’ Next Billion-Dollar Startups, and the #1 fastest-growing
company in America on the Inc. 5000. Through its philanthropic
initiatives, Skillz has used its platform to transform the way
nonprofits engage with donors, enabling anyone with a mobile device
to support great causes such as the American Red Cross, American
Cancer Society, and NAACP by playing in Skillz tournaments.
“Becoming a public company is an important milestone for
Skillz,” added Paradise. “We look forward to accelerating growth as
we work with our developer partners to bring Skillz-powered
competitions to every kind of game for billions of gamers
worldwide.”
Key Transaction Terms
The transaction implies an equity valuation for Skillz of $3.5
billion, or 6.3x projected 2022 revenue. Estimated cash proceeds
from the transaction are expected to consist of Flying Eagle’s $690
million of cash in trust. In addition, investors led by Wellington
Management Company, Fidelity Management & Research Company,
LLC, Franklin Templeton, and Neuberger Berman funds have committed
to invest $159 million in the form of a PIPE at a price of $10.00
per share of Class A common stock of Flying Eagle immediately prior
to the closing of the transaction. Flying Eagle’s stockholders with
the right to redeem shares representing in excess of $95 million of
cash in trust have agreed not to exercise such rights in connection
with the transaction.
It is anticipated that post-transaction Skillz will have
approximately $250 million of cash and cash equivalents on its
consolidated balance sheet. The company expects to use the proceeds
to accelerate Skillz’s growth in both domestic and international
markets, support marketing efforts, and provide additional working
capital.
Skillz stockholders may elect to receive their consideration in
either cash or stock of the combined company (or a combination of
both), subject to a maximum cash amount. The maximum cash amount
will be an amount equal to the cash remaining in Flying Eagle’s
trust account (after taking into account any redemptions by its
public stockholders and payment of Skillz’s and Flying Eagle’s
outstanding transaction expenses), plus the amount to be received
from the PIPE investment, plus the closing cash of Skillz less $250
million (which will remain on the consolidated balance sheet of the
combined company). If the aggregate amount of cash elected to be
received by the Skillz stockholders exceeds the maximum cash
amount, the cash to be received by each Skillz stockholder electing
to receive cash will be reduced on a pro rata basis and the Skillz
stockholders will receive additional stock of the combined company.
If the aggregate amount of cash elected to be received by the
Skillz stockholders is less than the maximum cash amount, the
excess cash will be allocated pro rata among the Skillz
stockholders and the number of shares of the combined company to be
received by each Skillz stockholder electing to receive stock
consideration will be adjusted downwards.
Paradise, Chafkin, substantially all of the existing Skillz
stockholders as well as Flying Eagle’s sponsor have agreed to a
24-month lock-up, subject to quarterly releases of 1.5 million
shares per holder commencing 180 days following the closing. Upon
the closing of the transaction, Paradise, who holds a controlling
voting interest in Skillz, will hold a controlling voting interest
in the combined company.
The Boards of Directors of each of Flying Eagle and Skillz have
unanimously approved the transaction. The transaction will require
the approval of the stockholders of both Flying Eagle and Skillz,
and is subject to other customary closing conditions, including the
receipt of certain regulatory approvals. The transaction is
expected to close in the Fall of 2020.
LionTree Advisors and Jefferies LLC are acting as financial
advisors to Skillz. Winston & Strawn LLP is acting as legal
advisor to Skillz. Goldman Sachs & Co. LLC is acting as
financial advisor to Flying Eagle as well as the exclusive
placement agent for the PIPE. White & Case LLP is acting as
legal advisor to Flying Eagle.
Investor Conference Call Information
Skillz and Flying Eagle will host a joint investor conference
call to discuss the proposed transaction today, Wednesday,
September 2, 2020 at 8:30 am ET.
To listen to the prepared remarks via telephone dial
1-877-407-4018 (U.S.) or 1-201-689-8471 (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), replay pin
number: 13709664 through September 9, 2020 at 11:59 pm ET.
Flying Eagle will file an investor presentation relating to the
proposed transaction with the SEC as an exhibit to a Current Report
on Form 8-K prior to the call, which will be available on the SEC’s
website at www.sec.gov.
About Skillz Inc.
Skillz is the leading mobile games platform that connects
players in fair, fun, and meaningful competition. The Skillz
platform helps developers build multi-million dollar franchises by
enabling social competition in their games. Leveraging its patented
technology, Skillz hosts billions of casual esports tournaments for
millions of mobile players worldwide, and distributes millions in
prizes each month. The company is headquartered in San Francisco
and backed by leading venture capitalists, media companies, and
professional sports leagues and franchises. Skillz has earned
recognition as one of Fast Company’s Most Innovative Companies,
CNBC’s Disruptor 50, Forbes’ Next Billion-Dollar Startups, and the
#1 fastest-growing company in America on the Inc. 5000.
www.skillz.com
About Flying Eagle Acquisition Corp.
Flying Eagle Acquisition Corp. is a $690 million special purpose
acquisition company founded by Harry E. Sloan, Jeff Sagansky, Eli
Baker and Alan Mnuchin for the purpose of effecting a merger,
capital stock exchange, asset acquisition, stock purchase,
reorganization, or similar business combination with one or more
businesses. Flying Eagle’s initial public offering was underwritten
by Goldman Sachs & Co. LLC and Deutsche Bank Securities, and
its common stock, units, and warrants began trading on the NYSE on
March 6, 2020 under the ticker symbol symbols FEAC, FEAC.U and FEAC
WS, respectively. www.eagleequityptnrs.com
Important Information About the Proposed Business Combination
and Where to Find It
In connection with the proposed business combination, Flying
Eagle intends to file a Registration Statement on Form S-4,
including a preliminary proxy statement/prospectus and a definitive
proxy statement/prospectus with the SEC. Flying Eagle’s
stockholders and other interested persons are advised to read, when
available, the preliminary proxy statement/prospectus and
the amendments thereto and the definitive proxy
statement/prospectus and documents incorporated by reference
therein filed in connection with the proposed business combination,
as these materials will contain important information about Skillz,
Flying Eagle, and the proposed business combination. When
available, the definitive proxy statement/prospectus and other
relevant materials for the proposed business combination will be
mailed to stockholders of Flying Eagle as of a record date to be
established for voting on the proposed business combination.
Stockholders will also be able to obtain copies of the preliminary
proxy statement/prospectus, the definitive proxy
statement/prospectus, and other documents filed with the SEC that
will be incorporated by reference therein, without charge, once
available, at the SEC’s website at www.sec.gov, or by directing a
request to: investors@eagleequityptnrs.com.
Participants in the Solicitation
Flying Eagle and its directors and executive officers may be
deemed participants in the solicitation of proxies from Flying
Eagle’s stockholders with respect to the business combination. A
list of the names of those directors and executive officers and a
description of their interests in Flying Eagle will be included in
the proxy statement/prospectus for the proposed business
combination and be available at www.sec.gov. Additional information
regarding the interests of such participants will be contained in
the proxy statement/prospectus for the proposed business
combination when available.
Skillz and its directors and executive officers may also be
deemed to be participants in the solicitation of proxies from the
stockholders of Flying Eagle in connection with the proposed
business combination. A list of the names of such directors and
executive officers and information regarding their interests in the
proposed business combination will be included in the proxy
statement/prospectus for the proposed business combination.
Forward-Looking Statements
This press release includes “forward-looking statements” within
the meaning of the “safe harbor” provisions of the United States
Private Securities Litigation Reform Act of 1995. Flying Eagle’s
and Skillz’s actual results may differ from their expectations,
estimates, and projections and, consequently, you should not rely
on these forward-looking statements as predictions of future
events. Words such as “expect,” “estimate,” “project,” “budget,”
“forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,”
“should,” “believes,” “predicts,” “potential,” “continue,” and
similar expressions (or the negative versions of such words or
expressions) are intended to identify such forward-looking
statements. These forward-looking statements include, without
limitation, Flying Eagle’s and Skillz’s expectations with respect
to future performance and anticipated financial impacts of the
proposed business combination, the satisfaction of the closing
conditions to the proposed business combination, and the timing of
the completion of the proposed business combination.
These forward-looking statements involve significant risks and
uncertainties that could cause the actual results to differ
materially from those discussed in the forward-looking statements.
Most of these factors are outside Flying Eagle’s and Skillz’s
control and are difficult to predict. Factors that may cause such
differences include, but are not limited to: (1) the occurrence of
any event, change, or other circumstances that could give rise to
the termination of the definitive merger agreement (the
“Agreement”); (2) the outcome of any legal proceedings that may be
instituted against Flying Eagle and Skillz following the
announcement of the Agreement and the transactions contemplated
therein; (3) the inability to complete the proposed business
combination, including due to failure to obtain approval of the
stockholders of Flying Eagle and Skillz, certain regulatory
approvals, or satisfy other conditions to closing in the Agreement;
(4) the occurrence of any event, change, or other circumstance that
could give rise to the termination of the Agreement or could
otherwise cause the transaction to fail to close; (5) the impact of
COVID-19 on Skillz’s business and/or the ability of the parties to
complete the proposed business combination; (6) the inability to
obtain or maintain the listing of Flying Eagle’s shares of common
stock on the NYSE following the proposed business combination; (7)
the risk that the proposed business combination disrupts current
plans and operations as a result of the announcement and
consummation of the proposed business combination; (8) the ability
to recognize the anticipated benefits of the proposed business
combination, which may be affected by, among other things,
competition, the ability of Skillz to grow and manage growth
profitably, and retain its key employees; (9) costs related to the
proposed business combination; (10) changes in applicable laws or
regulations; (11) the possibility that Skillz or Flying Eagle may
be adversely affected by other economic, business, and/or
competitive factors; and (12) other risks and uncertainties
indicated from time to time in the final prospectus of Flying Eagle
for its initial public offering and the proxy statement/prospectus
relating to the proposed business combination, including those
under “Risk Factors” therein, and in Flying Eagle’s other filings
with the SEC. Flying Eagle cautions that the foregoing list of
factors is not exclusive. Flying Eagle cautions readers not to
place undue reliance upon any forward-looking statements, which
speak only as of the date made. Flying Eagle does not undertake or
accept any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements to reflect
any change in its expectations or any change in events, conditions,
or circumstances on which any such statement is based.
No Offer or Solicitation
This press release shall not constitute a solicitation of a
proxy, consent, or authorization with respect to any securities or
in respect of the proposed business combination. This press release
shall also not constitute an offer to sell or the solicitation of
an offer to buy any securities, nor shall there be any sale of
securities in any states or jurisdictions in which such offer,
solicitation, or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended, or an exemption therefrom.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200902005370/en/
For Skillz PR: skillz@icrinc.com
For Skillz IR: ir@skillz.com
For Flying Eagle: Jeff Pryor jeff@prioritypr.net +1
818-661-6368, ext. 4
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