890 Fifth Avenue Partners, a publicly traded, special-purpose acquisition company (SPAC) is merging with BuzzFeed in a new deal, which will also see BuzzFeed acquire Complex Networks. BuzzFeed’s implied valuation at deal-closing will be $1.5 billion.
“BuzzFeed is now the undeniable leader for the next generation of media,” says Jonah Peretti, founder, chief executive officer, BuzzFeed. “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 join our team as we work towards becoming the world’s preeminent digital media company. The acquisition of Complex Networks will expand our reach into new audiences, complement our entertainment, news and lifestyle brands, and open the door to even more revenue opportunities.”
The transaction is expected to close in Q4 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 Jonah Peretti, BuzzFeed’s founder and chief executive officer, and Felicia DellaFortuna, its chief financial officer, continuing in their roles along with other executive team members. In addition, Adam Rothstein, executive chairman of 890 Fifth Avenue Partners and Greg Coleman, an advisor to 890 Fifth Avenue Partners and former BuzzFeed president, will join BuzzFeed’s board of directors. Two additional board members will be announced in the coming months, bringing added expertise and representation to the combined company.
“We looked at many different media businesses, but none had the kind of brands, digital assets or business model that BuzzFeed does and which we believe can achieve the kind of meaningful growth and returns for our investors,” says Rothstein. “Jonah and his team have built an incredible business. They are resilient, smart and innovative, which will be important as we move ahead.”
As part of the transaction, Peretti and Rothstein also announced an agreement with Hearst and Verizon to acquire Complex Networks, a global youth entertainment company. The $300 million acquisition – made up of $200 million in cash and $100 million of equity in BuzzFeed – will be completed simultaneously with the closing of BuzzFeed’s merger with 890 Fifth Avenue Partners.
The transaction has been approved by the boards of directors of both BuzzFeed and 890 Fifth Avenue Partners. The deal is expected to close in the fourth quarter of 2021, subject to the satisfaction of customary closing conditions, including the approval of 890 Fifth Avenue Partners’ stockholders. The transaction is expected to deliver approximately $288 million of cash held in 890 Fifth Avenue Partners’ trust account from its initial public offering in January 2021 and is further supported by a $150 million convertible note financing from institutional investors, led by Redwood Capital Management and including CrossingBridge Advisors, Cohanzick Management, and Silver Rock Financial.