Marquee Raine, SPAC Controlled by Cubs Owner, DraftKings Backer, Prices $325 Million IPO

Posted on: December 15, 2020, 09:13h. 

Last updated on: December 15, 2020, 10:48h.

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

Marquee Raine Acquisition Corp. has sold 32.50 million units at $10 apiece, pricing its initial public offering (IPO) at $325 million. The corporation is a special purpose acquisition company (SPAC).

Marquee Raine
Marquee Raine Acquisition went public today. The SPAC is controlled by Chicago Cubs ownership and a venture investor. (Image: Time Out)

The units start trading today on the Nasdaq Capital Market under the ticker “MRACU.” Underwriters have a 45-day window in which they can purchase another 4.875 million shares. In a sign of elevated enthusiasm for the offering, the warrant percentage attached to each unit was reduced.

Each unit consists of one share of common stock and one-fourth of a warrant, exercisable at $11.50. The company originally filed with one-third warrants, but lowered to quarter warrants likely in a sign of demand,” according to Renaissance Capital, an IPO research firm.

Marquee Raine was created by Chicago Cubs owner Tom Ricketts and venture capital firm Raine Group and will hunt for deals in the media, technology, and telecommunications arenas. But the focus will be on the sports landscape, including betting companies.

SPACs, also known as blank-check firms, raise capital through an IPO and use that cash to acquire another company. This provided the target with a faster route to becoming a publicly-traded entity. That efficiency is relevant at a time when markets are assigning rich multiples to operators with exposure to online casinos and sports wagering.

Sports Betting Targets Make Sense for Marquee Raine

A regulatory filing released prior to the IPO confirms Marquee Raine investigating assets in the real money gaming and sports realms, among others.

That’s a practical approach for the blank-check outfit. Not only because of Ricketts’ position as Cubs owner but also because Raine Group has extensive experience investing in gaming and sports companies. DraftKings (NASDAQ:DKNG), has the prime example of a betting operator born out of a SPAC deal.

The venture capital firm was also an investor in video gaming terminal distributor Accel Entertainment. It currently holds positions in the Pacific Lacrosse League (PLL), online arcade games provider Arcadia Gaming, Games 247, social gaming platform Rising Tide Games, internet games provider Super Evil Megacorp, and esports company VY. The firm has $3.3 billion in assets under management.

Marquee Raine hasn’t publicly disclosed specific ideas in terms of merger partners. SPACs usually have two years from the IPO date to find a deal or risk liquidation.

SPAC Fever Continues

To this point in 2020, 205 blank-check firms have gone public, raising a combined $70 billion. Those are hefty percentages of the overall domestic IPO market, with 356 offerings in 2020 accounting for a combined $124 billion.

That also means 205 SPACs that launched this year, including Marquee Raine and a slew of others with gaming industry ambitions, need to find merger partners next year or in 2022.

On that basis, Goldman Sachs is forecasting SPACs will drive $300 billion worth of mergers and acquisitions activity over the next two years.

On its first trading day, Marquee Raine is higher by 4.65 percent at this writing.