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New move in Asia’s Fast-growing Gaming Market: SPAC merger of GCL Asia with RF Acquisition Corp

Grand Centrex Limited, a video game distributor and publisher in Asia, announced on October 19th that it will become a publicly listed company by entering into a definitive business combination agreement with RF Acquisition Corp, a publicly traded special purpose acquisition company. This provides an alternative route to the public markets for Grand Centrex Limited. RF Acquisition Corp was formed with the sole purpose of using IPO proceeds to acquire an existing business, allowing that target to essentially “backdoor” list on a stock exchange. RF Acquisition Corp raised capital last year specifically to seek acquisition opportunities.

As part of the deal, RF Acquisition Corp shareholders will receive shares in the newly combined company. Their shares in the space will be converted to shares of the new publicly traded company. Through the transaction, the digital media company will receive approximately $1.2 billion in pre-merger equity value. In addition, the terms include $25 million in minimum cash proceeds delivered to GCL Asia's balance sheet. Upon completing the business combination, a further $42.9 million in gross cash proceeds are expected to be transferred from RF Acquisition Corp's trust account to the combined company. In total, the transaction stands to deliver over $68 million in funding to support GCL Asia's growth as a newly public organisation. Early Bird Capital is advising RF Acquisition on the financial aspects of the transaction.

GCL Asia is a leading video game distribution and publishing group in Asia. Through subsidiaries like Epicsoft Asia, 4Divinity, 2Game and Titan Digital Media, the company has operations across eight countries in the region. Leveraging over 16 years of experience in game distribution, marketing and creative services, GCL has become a key partner for international game publishers seeking to enter the Asian market. It has distributed over 50% of the best-selling games ever in the region, gaining significant expertise in the Asian gaming landscape. Recently, GCL expanded its business vertically into game publishing and IP management, which is expected to generate $225.5 billion of video game revenues in 2023, i.e. 57.8% of worldwide video game revenue. This shift allows the company to capture more value in the game lifecycle. GCL now aims to publish at least six new games in the next 12 months alone.

The SPAC merger with RF Acquisition Corp provides significant benefits for GCL Asia. It delivers a sizable $1.2 billion pre-transaction valuation along with access to over $68 million in capital infusion. This funding allows GCL to accelerate its expansion into higher-growth and higher-margin segments of game publishing and IP management across Asia. As the Asian gaming market continues rising to become the largest worldwide, securing public status through the listing equips GCL with the resources to capitalise on new opportunities emerging in the region. Going public also enhances GCL’s profile, increasing partnerships with international developers targeting Asia. Opting for a SPAC merger over a traditional IPO grants GCL a streamlined path to public funding. Leveraging RF Acquisition’s pre-existing public shell and ticker symbol further expedites the timeline for transitioning to a publicly traded company. Combined, these factors empower GCL Asia’s drive to scale its operations and solidify its leadership position in the booming Asian gaming landscape.

In conclusion, Grand Centrex leverages a SPAC merger with RF Acquisition Corp to facilitate its expansion in Asia’s fast-growing gaming market, securing a timely public listing and $1.2 billion valuation to capitalise on emerging opportunities in the region.

Written by: Jessica Feng

Sources: Capital IQ, GCL Press Release, Prnewswire, Marketech-apac

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