James Bond, Matrix Special Effects Firm Goes Public in $1.6 Billion SPAC Merger

One of Hollywood’s most renowned special effects companies is jumping from the ones and zeros of coding The Matrix to the statistical frenzy of stock indexes. DNEG — whose visual creators have won Academy Awards for work on Tenet, Inception,…

Jennifer
Image Credti: iStock, Kirk Wester
Sign up for insightful business news.

One of Hollywood’s most renowned special effects companies is jumping from the ones and zeros of coding The Matrix to the statistical frenzy of stock indexes.

DNEG — whose visual creators have won Academy Awards for work on Tenet, Inception, and Blade Runner 2049 — announced Tuesday that it’s combining with a special-purpose acquisition company (SPAC) to go public with a $1.6 billion valuation. The details are below (spoiler alert).

Coming Transactions

A quick refresher on SPACs, because it’s been a while. Also known as “blank check companies,” they raise money from investors and list on a stock exchange for the sole purpose of merging with a private company that wants to go public. In theory, this allows companies to avoid the regulatory hassles and paperwork of a traditional IPO. In reality, shares of merged SPAC companies have tumbled as regulators have stepped up scrutiny and investors have pulled out of tech-driven, early-stage companies. Shares for half the companies that merged with SPACs in the last two years are down 40% or more, amounting to billions in losses.

DNEG, which also did the effects for the recent James Bond blockbuster No Time Left to Die and The Matrix Resurrections, will merge with a SPAC called Sports Ventures Acquisition. While the blank check merger path is a fraught one, the company is convinced its magic will work on the trading floor:

  • The streaming wars are about to power never-before seen demand for special effects: the nine leading streaming companies — including Netflix, Disney, Warner Bros, Amazon, Comcast, and Apple — are expected to spend $140 billion on content in 2022 alone, according to a recent Wells Fargo analysis.
  • Effects companies are highly coveted because of their potential for the metaverse, a future internet world powered by avatars and online worlds — last month, video game maker Unity Software paid $1.6 billion for special effects studio Weta Digital, famous for its work on the Lord of the Rings movies.

Seeing is Believing: “I’ve never seen this type of demand uptick and a push toward quality and scale in the industry,” Namit Malhotra, DNEG’s CEO, told the Wall Street Journal. “We’re on a massive expansion spree.”

Analysis more

Tale of the Tape: Warren Buffett and Cathie Wood

Farm Strong: Understanding Agriculture as an Investment

Recent News

A Strong Dollar Could Save a Horrid M&A Environment

Retailers Struggle to Move Inventory, Slowing Shipping Industry

Disney and Dish Go To War in Contract Renewal Negotiations

Minneapolis Businessman Latest American to Vy for English Soccer Ownership

[subscribe-form listid="1ebbb697aaa44fb1971fe0a3c42ff841" source="organic" medium="organic" redirect-url="https://thedailyupside.com/thank-you/"]
<form action="" class="subscribe-form "> <input type="text" name="subscribe_form_email" placeholder="Enter your email"> <input type="text" name="subscribe_form_name" placeholder="Enter your name" value="" class="c-subscribe-from_field"> <button class="c-btn" id="subscribe-form-submit" type="submit">Subscribe</button> <div class="subscribe-form-message"></div> <div class="subscribe-form-vars"> <input type="hidden" class="subscribe-form-param" name="params[listid]" value="1ebbb697aaa44fb1971fe0a3c42ff841"> <input type="hidden" class="subscribe-form-param" name="params[source]" value="organic"> <input type="hidden" class="subscribe-form-param" name="params[medium]" value="organic"> <input type="hidden" class="subscribe-form-param" name="params[redirect_url]" value="https://thedailyupside.com/thank-you/"> </div> </form>