November 28, 2021

BuzzFeed to go public in Spac deal valuing it at S$2b, United States News & Top Stories

NEW YORK (BLOOMBERG) – BuzzFeed, the digital-media outlet, has struck a deal to go public through a merger with blank-check company 890 5th Avenue Partners.

The deal values BuzzFeed at US$1.5 billion (S$2 billion), according to a statement on Thursday.

The agreement, which comes after months of negotiations, confirms a Bloomberg News report in March that the parties were in talks.

As part of the deal, BuzzFeed also agreed to acquire youth-focused media company Complex Networks from Hearst and Verizon Communications for US$300 million, structured as US$200 million in cash and US$100 million in BuzzFeed equity.

The company 890 5th Avenue has US$288 million in trust, it said in the statement. Investors led by Redwood Capital Management, including CrossingBridge Advisors, Cohanzick Management and Silver Rock Financial, are contributing US$150 million in convertible-note financing to support the deal.

The shares of 890 5th Avenue were up 1.1 per cent to US$9.89 in New York trading at 10.16am.

The transaction caps a tumultuous time for BuzzFeed, which laid off employees during the pandemic and lost revenue from advertising and live events – before returning to profitability.

The company has also bulked up.

In November, it agreed to buy the HuffPost online news service from Verizon.

“With today’s announcement, we’re taking the next step in BuzzFeed’s evolution, bringing capital and additional experience to our business,” BuzzFeed chief executive officer Jonah Peretti said in the statement.

He will continue in his role, as will chief financial officer Felicia DellaFortuna.

BuzzFeed’s valuation has slipped slightly in the blank-check merger. As part of the HuffPost deal, Verizon acquired a minority stake in BuzzFeed that valued the company at about US$1.7 billion.

That was roughly the same as BuzzFeed’s valuation in 2016, when Comcast’s NBCUniversal invested US$200 million in the business, a person with knowledge of the matter said at the time. 890 5th Avenue – named after the fictional Avengers mansion – is led by executive chairman Adam Rothstein and CEO Emiliano Calemzuk. Rothstein will join BuzzFeed’s board.

The special purpose acquisition company raised US$287.5 million in a January initial public offering and has said it’s focused on technology, media and telecommunications.

BuzzFeed becomes the latest digital media company to try to take the Spac route to the public markets.

Vice Media, an online entertainment company, has been in talks to go public via Spac, Bloomberg News previously reported.

Bank of America advised BuzzFeed, while Cowen counseled the Spac and Allen & Co gave advice to Complex.

in World
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