BuzzFeed, valued at $1.5 billion, plans to go public through SPAC
BuzzFeed, the digital media company known for its irreverent lifestyle and entertainment content, is going public.
The New York-based firm, which launched in 2006, said Thursday that it plans to merge with a special purpose acquisition company, 890 Fifth Avenue Partners Inc.
The deal, which is expected to close in the fourth quarter, will give BuzzFeed a valuation of $1.5 billion and the ticker symbol BZFD.
As part of the transaction, BuzzFeed will acquire New York-based Complex Networks, a youth network that features fashion, food, music and sports content, for $300 million. The amount will consist of $200 million in cash and $100 million in BuzzFeed equity.
“We’ve built a slate of essential brands, loved by the most diverse, engaged and loyal audience on the Internet,” BuzzFeed Chief Executive Jonah Peretti said in a statement. “With today’s announcement, we’re taking the next step in BuzzFeed’s evolution, bringing capital and additional experience to our business.”
After the deal closes, Peretti and other executive team members will remain in their roles, BuzzFeed said. Complex CEO Rich Antoniello will become a founder at large and advisor to Peretti and the Complex team. Christian Baesler, currently Complex’s president, will become the network’s CEO.
BuzzFeed’s backers include its largest investor, Comcast Corp.’s NBCUniversal, which invested $400 million in the company in 2015 and 2016.
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BuzzFeed and 890 Fifth Avenue Partners said the deal positions BuzzFeed to add more businesses to its portfolio in the future.
“With public investment and capital we’ll have opportunity to pursue more acquisitions, and there are more exciting companies out there that we want to pursue,” Peretti said at a news conference Thursday.
Like other media companies, BuzzFeed was hit hard by the COVID-19 pandemic and laid off employees to offset declines in revenue from advertising and live events.
Earlier this year, BuzzFeed acquired the HuffPost from Verizon Media for an undisclosed price. As part of the deal, Verizon Media became a minority shareholder in BuzzFeed, which was valued at $1.7 billion.
BuzzFeed restructured HuffPost this year, laying off 47 U.S. employees and making other changes, including closing HuffPost Canada, to stem losses that totaled more than $20 million in 2020, according to the company.
BuzzFeed’s plan to go public through a SPAC follows a larger trend of more Hollywood insiders launching their own so-called blank check companies that aim to buy businesses and take them public. Some companies may prefer a SPAC if they do not want to deal with the scrutiny of an initial public offering road show but need to raise cash.
In February, a SPAC led by former Disney executives Kevin Mayer and Tom Staggs announced plans to merge with fitness video app Beachbody and connected workout equipment maker Myx Fitness.
890 Fifth Avenue Partners, based in Rye, N.Y, is a SPAC that focuses on converging technology, media and telecommunications opportunities.
“We looked at many different media businesses, but none had the kind of brands, digital assets or business model that BuzzFeed does and which we believe can achieve the kind of meaningful growth and returns for our investors,” Adam Rothstein, executive chairman of 890 Fifth Avenue Partners, said in the statement.
As younger audiences shift to streaming services such as Netflix that do not have commercials, Peretti believes that BuzzFeed can appeal to advertisers trying to reach Gen Z and millennials, who spend 806 million minutes a month across BuzzFeed’s properties.
“There’s a need to reach consumers, particularly millennials and Gen Z consumers, and there are not good ways to do it,” Peretti said. “And as subscription mania continues, that’s only going to become a bigger issue, and so I think advertising can be a great business.”
“Utopia” is the name of the room that BuzzFeed Chief Executive Jonah Peretti uses as his L.A. office, but the last few months have been anything but that.
Peretti created BuzzFeed initially as a lab in New York’s Chinatown, where it experimented with the ways people engaged with content online. The company has since grown to be a major digital media player. Its brands include BuzzFeed News, HuffPost, BuzzFeed Entertainment and food network Tasty Lifestyle Brands. Earlier this month, BuzzFeed News won the Pulitzer Prize in international reporting.
Last year, the company said it had reached profitability.
Times staff writer Ryan Faughnder contributed to this report.
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