Another gaming industry merger is in the pipeline, a Friday filing with the US Securities and Exchange Commission (SEC) from the special purpose acquisition company (SPAC) Gaming & Hospitality Acquisition Corp revealed.
According to the filing, the blank check company would seek to identify, acquire and develop a business within the gaming and hospitality industry as per the experience of its management team. Gaming & Hospitality Acquisition Corp expects to raise in excess of $150 million for the purpose through an initial public offering (IPO).
Affinity Gaming, which is the parent company of Silver Sevens casinos in Las Vegas as well as other gaming properties in Nevada, Iowa and Missouri, would merge with the SPAC and one other company, according to the plans outlined by the blank check company which registered for an IPO on Friday.
Gaming & Hospitality Acquisition, which would merge with its sponsor, noted in the SEC filing no serious discussions regarding a merger started, but outlined potential targets would be companies from the gaming and hospitality businesses.
“We seek to acquire one or more businesses with assets that are fundamentally sound yet are underperforming their potential”
Among acquisition targets for the SPAC may be gaming properties or businesses, real estate investment trust (REIT)-owned properties, gaming platforms, online gambling or sports betting operators, as well as suppliers of technology for the gaming sector.
Leverage Its Management Team’s Expertise
The blank check company would be managed by Z Capital President and CEO James Zenni and Affinity Gaming CEO Mary Beth Higgins both of which boast significant experience and expertise in the gaming industry which Gaming & Hospitality Acquisition Corp would seek to leverage and “help one or more businesses achieve long-term strategic and operational excellence”.
Regarding the IPO, Affinity Gaming agreed to purchase units to the amount of $6.7 million or above, and the rest of the units would start trading on the NASDAQ under the symbol GHACU.
The merger between Gaming & Hospitality Acquisition with Affinity Gaming is the latest SPAC merger within the gambling industry, following on the footsteps of companies like DraftKings and Golden Nugget Online Gaming.
Boston-based DraftKings went public in April last year, after a three-way merger with its sports betting technology supplier SBTech and blank check company Diamond Eagle Acquisitions, while the online gaming division of Golden Nugget merged with Landcadia Holdings II, Inc. in June, to start trading on the NASDAQ.
The SPAC-style merger allows private operating companies the opportunity to raise capital through an IPO while providing a stake for the founders of the blank check company in the business acquired after the transaction.