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Digital media giant BuzzFeed is merging with a special purpose acquisition company (SPAC) and going public in a bid to roll up and consolidate some of the digital media industry. The deal will value the company at $1.5 billion.
The company says that it has agreed to merge with 890 5th Avenue Partners, a SPAC which raised $250 million in an IPO earlier this year. 890 5th Avenue — named after the headquarters of The Avengers in the Marvel comics universe — is led by CEO Emiliano Calemzuk and executive chairman Adam Rothstein, and counts NBCUniversal ad sale chief Linda Yaccarino, former BuzzFeed president Greg Coleman, Time Warner comms chief Gary Ginsberg, and former ESPN executive John Kosner among its advisers.
The SPAC holds $288 million in cash, and BuzzFeed has secured an additional $150 million in convertible note financing.
Coleman and Rothstein will join BuzzFeed’s board after the merger, and the company will also add two other board members in the coming months.
BuzzFeed plans to use the fresh cash to acquire another digital media company, Complex Networks, continuing efforts to roll up a number of players in the digital media space. Complex Networks includes the style and pop culture brand Complex, as well as First We Feast, which produces the popular YouTube show Hot Ones.
Complex is valued at $300 million in the sale, with owners Hearst and Verizon receiving $200 million in cash, and $100 million in stock.
BuzzFeed includes the namesake digital brand and website, BuzzFeed News, and Tasty. Last year BuzzFeed also acquired HuffPost from Verizon Media, reuniting BuzzFeed CEO Jonah Peretti with the digital news outlet he previously co-founded alongside Arianna Huffington. Peretti will continue as CEO after the deal closes.
According to an investor presentation, BuzzFeed had revenue of $421 million in 2020, and expects to have $521 million in 2021. In 2020, the company had net income of $4 million.
The company says it expects the deal to close in the fourth quarter of 2021, with BuzzFeed trading under the ticker “BZFD.”
And BuzzFeed is not alone in its efforts to go public via a SPAC. Vice Media, led by CEO Nancy Dubuc, is also said to be pursuing a SPAC merger, also looking to raise cash to pursue acquisitions and roll up digital businesses.
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