Baseball card company Topps to go public through SPAC deal

Topps, which is best known for its baseball cards and Bazooka candy line, has agreed to go public through a merger with Mudrick Capital Acquisition Corporation II, a special purpose acquisition company, that values Topps at $1.3 billion.

Former Disney CEO Michael Eisner will stay on as Topps’ chairman. Mudrick Capital and funds and accounts managed by Gamco Investors and Wells Capital Management are expected to invest an additional $250 million in the SPAC. Private equity firm Madison Dearborn Partners intends to sell most of its ownership in Topps, but Eisner’s firm The Tornante Company will roll its entire equity stake into the new combined company.

The deal is expected to close in the late second or early third quarter. The combined company will be called Topps and will trade on the Nasdaq under the ticker TOPP. The New York Times’ Dealbook was the first to report the deal.

Eisner said on CNBC’s “Squawk Box” on Tuesday that Topps opted to go public through a SPAC because of the flexibility and limited distraction to management.

Topps’ net sales rose 23% in 2020 to $567 million, a record high for the company. While Topps is best known for its sports trading cards, it has branched out into interactive mobile apps to connect collectors and recently expanded into nonfungible tokens. Ownership of an NFT is recorded on a blockchain, similar to the networks that underpin cryptocurrencies. Each NFT is unique and can’t be duplicated, just like owning an original painting or a rare baseball card.

“This is the icing on the cake, going digital completely, with the analog still in place,” Eisner said.

Other companies, including Taco Bell and Atari, have also jumped on the NFT bandwagon. Funko, which makes collectible vinyl figurines, recently bought an NFT start-up to help it navigate the new trend. But Eisner said that the deal was struck before the recent explosion in NFTs, which has also included big sports moments. In late February, Dapper Labs said consumers had already spent more than $230 million buying and trading highlights from the National Basketball Association.

Topps also has a gift cards business under the name Topps Digital Services, where it works with companies like Netflix, Airbnb and Nike. Its candy segment includes iconic brands like Bazooka, Ring Pop and Baby Bottle Pop and accounts for 35% of sales.