BuzzFeed has agreed to a deal with a blank check company, which said the company’s implied valuation is $1.5 billion because digital media companies are eager to raise funds to better compete with tech giants such as Google and Facebook.
The 14-year-old company will merge with 890 Fifth Avenue Partners, a special purpose acquisition company that raised $288 million earlier this year.
BuzzFeed also agreed to acquire Complex Networks, a digital publisher focused on streetwear and pop culture, from Verizon and Hearst for US$200 million in cash and US$100 million in equity.
BuzzFeed raised an additional $150 million through convertible bonds led by Redwood Capital Management, instead of private investment in public equity financing that has become the norm in Spac transactions.
Known for its lists and quizzes, BuzzFeed is one of a generation of digital media groups that have attracted billions of dollars at high valuations because they are hailed as the future of news media.
However, these companies have been struggling to meet expectations, leading to a substantial decline in the valuation and consolidation of the entire industry. BuzzFeed was previously valued at $1.7 billion in a 2016 funding round.
Jonah Peretti was previously the co-founder of the Huffington Post. He created the BuzzFeed website in 2006 using popular content on the Internet. The company hired reporter Ben Smith to build a serious news business in 2011, and the group recently won the first Pulitzer Prize for International Reporting.
In recent years, digital media companies have been looking for ways to join together because they Struggling to survive In a rapidly evolving media environment.
In the past few years, Vox has acquired New York Media, which is the group behind New York Magazine and websites including Vulture, and Vice Buy Refinery29. BuzzFeed itself Huffington Post From Verizon last year.
According to a person close to the company, BuzzFeed can use its public listing as a tool for more transactions, adding that Peretti is keen to integrate as many digital companies as possible to expand the scale of advertising.
The person added that, as some analysts have speculated, BuzzFeed is unlikely to merge with Vice, because it is difficult to merge the company with very strong leaders who are difficult to work with.
Peretti will continue to operate BuzzFeed as a public company. Adam Rothstein, Spac’s executive chairman, and Greg Coleman, former BuzzFeed president and Spac consultant, will join the company’s board of directors.
In a note to employees on Thursday, Peretti said: “We finally have enough scale to influence the way the larger media industry operates and help shape a better future model”, adding that the company The annual revenue will be “more than 5 billion.” [dollars]”This year’s income.