DNEG, the U.K.-headquartered visual effects and animation company that won an Oscar for Tenet, is set to go public by merging with Sports Ventures Acquisition Corp., a special purpose acquisitions company.
Unveiled on Tuesday, the transaction has a combined merger value of around $1.7 billion. London-headquartered DNEG — whose recent VFX credits include Dune, The Matrix Resurrections, Venom: Let There Be Carnage, Last Night in Soho and the James Bond film No Time to Die — has been expanding into feature animation and content creation in areas such as gaming.
DNEG is also the preferred visual effects creator for Christopher Nolan on movies like Inception, Interstellar and Tenet. Sports Ventures Acquisition is a blank check company that targeted sports, media and entertainment companies before finding a fit with DNEG and is led by CEO and chairman Alan Kestenbaum, a minority investor in the Atlanta Falcons.
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“We are perfectly positioned to exploit massive new opportunities in the metaverse and the convergence of all forms of content creation,” DNEG chairman and CEO Namit Malhotra, who will lead the combined companies after the merger is completed, said in a statement.
DNEG said it expects to receive around $400 million in gross transaction proceeds, including a $168 million common stock PIPE at a purchase price of $10 per share from leading investors that include affiliates of Sports Ventures, Novator Capital Limited, affiliates of Fairfax Financial and Arbor Financial.
DNEG employs an estimated 7,000 people across studios, which include sites in Canada, its London headquarters, Los Angeles and four locations in India. The proposed merger, already approved by the boardrooms of Sports Ventures and DNEG, is expected to close in the first half of 2022, subject to approval by Sports Ventures’ shareholders and other closing conditions.
