Jam City Inc., the developer behind mobile game Cookie Jam and Disney Pop Town, has agreed to go public in a reverse merger with a blank-check company, according to people with knowledge of the matter.
As part of the transaction, Jam City is acquiring Montreal-based game publisher Ludia Inc., said the people, who asked not to be identified because the information is private. The two companies will combine with DPCM Capital Inc., the special purpose acquisition company set up by a former Uber Technologies Inc. executive, the people said.
The combined company will have a valuation of $1.2 billion including debt, said the people. Representatives for Jam City, DPCM and Ludia declined to comment.Nearly all gaming companies benefited from the home entertainment surge during the coronavirus pandemic. With more people stuck indoors, the companies’ user bases exploded, and are expected to stay high even as life returns to normal. Attracted by the companies’ explosive growth, investor interest in gaming stocks has been high as well. Earlier this year, game-maker Roblox Corp. went public via a direct listing, another alternative to an initial public offering.
Korean game-making giant Netmarble Corp., an existing investor of Jam City, led the $100 million private placement that is being raised to support the deal, the people said.
The acquisition of Ludia, which makes games based on the “Jurassic World” movies, is valued at about $175 million, they said.
Jam City was founded in 2010 by Chris DeWolfe, a MySpace co-founder as well as its former chief executive officer. Culver City, California-based Jam City has a multiyear game development agreement with Walt Disney Co., along with its in-house offerings.
DPCM, the blank-check firm, is led by Chairman and CEO Emil Michael, a former senior vice president of business for Uber. The company raised $300 million in its October IPO.