BuzzFeed closes in on deal to go public

Written by Edmund Lee
BuzzFeed, the digital writer recognized for quizzes, listicles and a information division that gained its first Pulitzer Prize this month, is near reaching a merger deal that may take the corporate public, an individual with information of the corporate stated Wednesday.
An announcement might come as quickly as this week, the individual added. BuzzFeed declined to remark.
Led by its founder and chief government, Jonah Peretti, BuzzFeed has been in talks to merge with an already public shell firm, 890 Fifth Avenue Partners, in what is called a SPAC deal. (The acronym stands for particular objective acquisition firm.)
Hatched out of a small workplace in New York’s Chinatown in 2006, BuzzFeed began as an experiment in creating content material meant to be shared on the net, again when Peretti was the chief know-how officer of The Huffington Post. He left what’s now HuffPost in 2011, after AOL purchased it for $315 million, and ended up reworking his venture right into a stand-alone media firm with the assistance of $35 million from traders.
Jonah Peretti, the BuzzFeed founder, at workplaces in New York, Aug. 7, 2014. (Chang W. Lee/The New York Times)
BuzzFeed quickly grew to become one of many fastest-growing digital publishers, ultimately elevating $500 million at a valuation of $1.7 billion, and was hailed as the way forward for information media. But lately it has missed bold income targets, and a few of its traders have agitated for a sale.
After a sequence of layoffs in 2019, BuzzFeed began to diversify its enterprise, promoting branded cookware and ramping up its product suggestion part, garnering a fee on every sale by affiliate agreements with Amazon and different corporations. “Our model evolved,” Peretti stated in an interview final yr.
Peretti, who has sway over the BuzzFeed board regardless of proudly owning a minority of shares, had talks about doable mergers with opponents together with Vice Media, Group Nine and Vox Media. The thought was to create a digital-media large, one that may have some leverage over Facebook and Google, platforms that proceed to dominate internet advertising.
In November, Peretti orchestrated BuzzFeed’s acquisition of HuffPost, the location he helped discovered with Arianna Huffington and investor Kenneth Lerer. This bigger model of BuzzFeed is the corporate that would go public in a SPAC deal. The anticipated public itemizing might additionally embrace a debt sale to boost cash that might be used to purchase different digital publishers.
SPAC offers, a as soon as arcane Wall Street maneuver, have change into extra frequent over the past yr. Special objective acquisition corporations, shell companies that listing on a inventory trade, are often created with the objective of shopping for a personal enterprise and taking it public.
Group Nine, the BuzzFeed rival, has gone a unique route. It created a SPAC of its personal in December, with the purpose of discovering an organization to accumulate earlier than going public.
BuzzFeed expects to eke out a pretax revenue this yr on about $500 million in gross sales, the individual with information of the corporate stated.