BuzzFeed, the digital publisher known for its quizzes, articles and news division that won its first Pulitzer Prize this month, is close to a merger deal that will take the company public , a person with knowledge of the company said Wednesday.
An announcement could be made as soon as this week, the person added. BuzzFeed declined to comment.
Led by founder and chief executive officer, Jonah Peretti, BuzzFeed negotiated to merge with a public shell company, 890 Fifth Avenue Partners, in a SPAC deal. (Acronym for special purpose acquisition company.)
Born out of a small office in New York’s Chinatown in 2006, BuzzFeed began as an experiment in creating shareable content on the web, when Mr. Peretti was chief technology officer of The Huffington Post. . He left HuffPost in 2011, after AOL bought it for $315 million and eventually turned his project into an independent media company with the help of $35 million from investors. fourth.
BuzzFeed quickly became one of the fastest growing digital publishers, eventually raising $500 million at a $1.7 billion valuation and being hailed as the future of information communication. ie. But in recent years, the company has missed ambitious revenue targets, and some of the company’s investors have incited a sale.
After a series of layoffs in 2019, BuzzFeed began diversifying its business, selling branded cookware and beefing up product recommendations, earning commissions on each sale through its affiliates. Affiliate agreements with Amazon and other companies. “Our model has evolved,” Mr. Peretti said in an interview last year.
Mr. Peretti, who has been controversial with the BuzzFeed board despite owning few shares, has talked about the possibility of a merger with competitors including Vice Media, Group Nine and Vox Media. The idea was to create a digital media giant, one that would have some leverage over Facebook and Google, which continue to dominate online advertising.
In November, Mr. Peretti arranged BuzzFeed’s acquisition of HuffPost, the website he helped found with Arianna Huffington and investor Kenneth Lerer. This larger version of BuzzFeed is a company that can list shares in a SPAC deal. The expected public listing could also include a debt sale to raise money that could be used to buy other digital publishers.
SPAC deals, a once-mystery Wall Street trick, have become more popular in the last year. Special-purpose acquisition companies, shell corporations listed on a stock exchange, are often established with the goal of buying a private business and taking it public.
Group Nine, BuzzFeed’s rival, went a different route. It created a SPAC of its own in December, with the aim of finding a company to buy back before listing shares.
BuzzFeed is expected to generate pre-tax profits this year on about $500 million in revenue, a person with knowledge of the company said.