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BuzzFeed plans to go public through SPAC

The LA Times logo The LA Times 6/24/2021 Wendy Lee
Jonah Peretti standing in a room: BuzzFeed CEO Jonah Peretti inside Buzzfeed's Los Angeles office in 2019. The digital media company plans to go public. (Gina Ferazzi / Los Angeles Times) © (Gina Ferazzi / Los Angeles Times) BuzzFeed CEO Jonah Peretti inside Buzzfeed's Los Angeles office in 2019. The digital media company plans to go public. (Gina Ferazzi / Los Angeles Times)

BuzzFeed, the digital media company known for its irreverent lifestyle and entertainment content, is going public.

The New York-based firm, which launched in 2006, said Thursday that it plans to merge with a special purpose acquisition company, 890 Fifth Avenue Partners Inc.

The deal, which is expected to close in the fourth quarter, will give BuzzFeed a valuation of $1.5 billion and the ticker symbol "BZFD."

As part of the transaction, BuzzFeed will acquire Complex Networks, a youth network that features fashion, food, music and sports content, for $300 million. The amount will be made up through $200 million in cash and $100 million in BuzzFeed equity.

"We've built a slate of essential brands, loved by the most diverse, engaged and loyal audience on the Internet," BuzzFeed CEO Jonah Peretti said in a statement. "With today's announcement, we're taking the next step in BuzzFeed's evolution, bringing capital and additional experience to our business."

Peretti and other executive team members will remain in their roles after the deal closes, BuzzFeed said.

BuzzFeed's owners include Comcast Corp.'s NBCUniversal, which invested $400 million in the company in 2015 and 2016.

Like other media companies, BuzzFeed was hard hit by the COVID-19 pandemic and laid off employees to offset declines in revenue from advertising and live events.

Earlier this year, BuzzFeed acquired the HuffPost from Verizon Media for an undisclosed price. As part of the deal, Verizon Media became a minority shareholder in BuzzFeed, which was valued at $1.7 billion.

BuzzFeed restructured HuffPost this year, laying off 47 U.S. employees and making other changes, including closing HuffPost Canada to stem losses that totaled more than $20 million in 2020, according to the company.

BuzzFeed's plans to go public through a SPAC follows a larger trend of more Hollywood insiders launching their own blank check companies or SPACs that aim to buy businesses and take them public. Some companies may prefer a SPAC if they do not want to deal with scrutiny of an IPO road show but need to raise cash.

In February, a SPAC led by former Disney executives Kevin Mayer and Tom Staggs announced plans to merge with fitness video app Beachbody and connected workout equipment maker Myx Fitness.

890 Fifth Avenue Partners, based in Rye, N.Y, is a SPAC that focuses on converging technology, media and telecommunications opportunities.

"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," said Adam Rothstein, executive chairman of 890 Fifth Avenue Partners Inc. in the statement.

Peretti created BuzzFeed initially as a lab in New York's Chinatown, where it experimented with the ways people engaged with content online. The company has since grown to be a major digital media player. The company's brands include BuzzFeed News, HuffPost, BuzzFeed Entertainment and food network Tasty Lifestyle Brands. Last year, the company said it reached profitability.

BuzzFeed said Gen Z and millennials spend 806 million minutes a month across its properties, HuffPost and Complex, which it will acquire in the fourth quarter.

Times staff writer Ryan Faughnder contributed to this report.

This story originally appeared in Los Angeles Times.

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