BuzzFeed, the digital writer recognized for quizzes, listicles and a information division that received its first Pulitzer Prize this month, is shut to reaching a merger deal that might take the company public, an individual with data of the company mentioned Wednesday.
An announcement might come as quickly as this week, the particular person added. BuzzFeed declined to remark.
Led by its founder and chief govt, Jonah Peretti, BuzzFeed has been in talks to merge with an already public shell company, 890 Fifth Avenue Partners, in what is called a SPAC deal. (The acronym stands for particular function acquisition company.)
Hatched out of a small office 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 Mr. Peretti was the chief technology 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 project right into a stand-alone media company with the assistance of $35 million from traders.
BuzzFeed quickly turned one of many fastest-growing digital publishers, finally 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 collection of layoffs in 2019, BuzzFeed began to diversify its business, promoting branded cookware and ramping up its product advice part, garnering a fee on every sale by way of affiliate agreements with Amazon and different firms. “Our model evolved,” Mr. Peretti mentioned in an interview final year.
Mr. Peretti, who has sway over the BuzzFeed board regardless of proudly owning a minority of shares, had talks about potential mergers with opponents together with Vice Media, Group Nine and Vox Media. The thought was to create a digital-media big, one that might have some leverage over Facebook and Google, platforms that proceed to dominate internet marketing.
In November, Mr. Peretti orchestrated BuzzFeed’s acquisition of HuffPost, the location he helped discovered with Arianna Huffington and the investor Kenneth Lerer. This bigger model of BuzzFeed is the company that might go public in a SPAC deal. The anticipated public itemizing might additionally embrace a debt sale to increase money that could possibly be used to purchase different digital publishers.
SPAC offers, a as soon as arcane Wall Street maneuver, have turn into extra widespread during the last year. Special function acquisition firms, shell companies that record on a stock alternate, are often created with the objective of shopping for a personal business 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 intention of discovering a company to purchase earlier than going public.
BuzzFeed expects to eke out a pretax revenue this year on about $500 million in gross sales, the particular person with data of the company mentioned.