BuzzFeed declares plans to go public by way of SPAC and is concentrating on a valuation of $ 1.5 billion

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. They added that it “will accelerate BuzzFeed’s revenue growth immediately”.

“With this acquisition, BuzzFeed is even better positioned to thrive in the age of media consolidation,” said the company. BuzzFeed acquired Verizon Media’s HuffPost news site in November for an undisclosed amount.

BuzzFeed had annual sales of $ 321 million and Adjusted EBITDA of $ 31 million in 2020, largely due to its e-commerce business, a spokesman previously told CNBC. The company estimates sales of $ 654 million in 2022 and adjusted EBITDA of $ 117 million, according to an investor presentation.

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.

BuzzFeed trades on the Nasdaq under the symbol “BZFD”. The company said its management team will remain after the deal, with founder Jonah 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. The company has also expanded its business in other areas, moving into e-commerce, selling things like branded cookware and affiliate commerce.

This story evolves. Please update for updates.

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