BuzzFeed is going public in a deal with a special purpose acquisition company (SPAC), which will give the digital media company an implied valuation of $1.5 billion once the pact closes, the company announced.
BuzzFeed will become a publicly traded company through a merger with 890 Fifth Avenue Partners, a SPAC that holds $288 million in cash in its trust account. In addition, BuzzFeed has secured $150 million in financing led by Redwood Capital Management and including CrossingBridge Advisors, Cohanzick Management, and Silver Rock Financial.
As part of the SPAC transaction, BuzzFeed plans to acquire Complex Networks, a global youth content network targeting millennials and Gen Z jointly owned by Verizon and Hearst, for $300 million. The price tag will comprise $200 million in cash and $100 million of equity in BuzzFeed. The Complex Networks deal will be completed simultaneously with the closing of BuzzFeed’s merger with 890 Fifth Avenue Partners.
In a memo to staff, BuzzFeed founder and CEO Jonah Peretti said the company is projecting more than $500 million in revenue for 2021. With that run rate, “we finally have the scale to influence how the larger media industry works and help shape a better model for the future,” he wrote.
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BuzzFeed said the SPAC merger is expected to close in the fourth quarter of 2021. The parent company will be known as “BuzzFeed Inc.” and trade its shares of common stock on a public exchange under the ticker symbol “BZFD.”
BuzzFeed’s management team will remain in place, with Peretti and CFO Felicia DellaFortuna continuing in their roles alongside other executive team members. In addition, Adam Rothstein, executive chairman of 890 Fifth Avenue Partners, and Greg Coleman, an adviser to the SPAC (and former BuzzFeed president) will join BuzzFeed’s board of directors. Two additional board members will also be announced in the coming months.
“BuzzFeed is now the undeniable leader for the next generation of media,” Peretti said in a statement. “We’ve built a slate of essential brands, loved by the most diverse, engaged, and loyal audience on the internet. With today’s announcement, we’re taking the next step in BuzzFeed’s evolution, bringing capital and additional experience to our business. I am thrilled to have Adam [Rothstein] join our team as we work towards becoming the world’s preeminent digital media company.”
Pictured above: Jonah Peretti, BuzzFeed founder and CEO
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