Jonah Peretti, Founder and CEO of Buzzfeed, speaks at the Wall Street Journal Digital Conference in Laguna Beach, California, United States on October 18, 2017.
Lucy Nicholson | Reuters
BuzzFeed, a 15-year-old digital media company, announced Thursday that it plans to go public through a merger with a publicly traded special purpose vehicle.
The company, which merges with 890 Fifth Avenue Partners, is targeting a valuation of $ 1.5 billion. The deal is expected to close in the fourth quarter.
BuzzFeed also plans to acquire Complex Networks, a digital publisher specializing in streetwear, music and culture, for $ 300 million. The deal consists of $ 200 million in cash and $ 100 million in equity from BuzzFeed, the company said. It added that it “will immediately accelerate BuzzFeed’s revenue growth.”
The SPAC could help strengthen the company’s position in acquisitions of other digital media companies, BuzzFeed co-founder and boss Jonah Peretti told CNBC’s TechCheck. Peretti said there are “many other attractive opportunities out there”.
“Having spoken with company founders and company management teams, I think it’s very exciting to join us,” said Peretti. BuzzFeed acquired Verizon Media’s HuffPost news site in November for an undisclosed amount.
BuzzFeed had annual sales of $ 321 million in 2020 and adjusted earnings before interest, taxes, depreciation and amortization of $ 31 million, largely due to its e-commerce business. The company estimates sales of $ 654 million in 2022 and adjusted EBITDA of $ 117 million, according to an investor presentation.
BuzzFeed trades on the Nasdaq under the symbol “BZFD”. The company said its management team will remain after the transaction, with Peretti remaining as CEO and Felicia DellaFortuna as CFO.
“With today’s announcement, we are taking the next step in the evolution of BuzzFeed and bringing capital and additional experience to our business,” Peretti said in a statement on Thursday. The company has also expanded its business in other areas, moving into e-commerce, selling things like branded cookware and affiliate commerce.
SPAC deals have become an increasingly popular way to go public over the past year. Several digital publishers, including the Bustle Digital Group, Vox Media and Vice Media, had discussions about a launch via a SPAC, CNBC previously reported.
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