Tekkorp Digital Latest Gaming SPAC to Call it Quits

Tekkorp Digital Acquisition (NASDAQ: TEKK) has scrapped plans to seek an extension to its business combination time line. It becomes the latest gaming-focused special purpose acquisition company (SPAC) to fall victim to a blank-check thaw in the industry.

Tekkorp Digital CEO Matt Davey in a 2020 interview. The SPAC is liquidating later this month. (Image: YouTube)

Earlier this week, the Las Vegas-based SPAC said it’s halting discussions with Playtech, Caliente Interactive, and Caliplay. That also ends what was the last of four bids for an Illinois mobile sports wagering license not tied to a land-based casino in the state, meaning all four of those efforts failed in some form.

The company will begin the process of winding down effective October 26, 2022, as set forth in its Amended and Restated Memorandum and Articles of Association, and as promptly as reasonably possible, but not more than ten business days thereafter, return capital to the company’s respective shareholders,” according to a Tekkorp statement.

SPACs generally have two years to execute business combinations, including mergers, and if that doesn’t happen, the firms can seek extensions or liquidate and return capital to investors. Tekkorp went public in late September 2020.

So Close for Tekkorp

Tekkorp was reportedly close to landing a deal, but that obviously didn’t come to fruition.

Last December, reports surfaced the SPAC was in talks with Caliente Interactive to bring that company public at a valuation of $2.5 billion. UK-based Playtech, a maker of gaming software, controls nearly half of Caliente through a joint venture. Caliente does most of its business in Mexico.

That transaction didn’t come to life, but Playtech, Caliente, and Tekkorp kept negotiations alive in hopes of arranging another deal and procuring an online sports betting permit in Illinois.

“Management focused on high quality opportunities at fair valuations. As a result of persistently high valuation expectations combined with an increasingly volatile market and declining IPO market, the company was unable to secure an opportunity that it believes would offer a compelling return on investment for its shareholders,” according to the SPAC.

“In light of these circumstances, the Company has determined that it is not feasible to complete an initial business combination by October 26, 2022 and no longer believes that seeking an extension to such date would allow the Company to secure a compelling opportunity for its shareholders.”

SPAC Failures Piling Up

At the end of the third quarter, 22 SPACs liquidated year-to-date — more than double the tally in the previous five years.

Several of those liquidations occurred among blank-check firms that were looking for gaming industry targets, or those that had agreements that fall apart in the wagering space.

Earlier this week, a regulatory filing from Las Vegas Golden Knights owner Bill Foley confirmed he’s shuttering two SPACs, one of which was supposed to merge with Wynn Interactive.

The post Tekkorp Digital Latest Gaming SPAC to Call it Quits appeared first on Casino.org.

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