NEW YORK (AP) — Digital media company BuzzFeed is setting its sights on growth. It plans to become a publicly traded company with an implied value of USD1.5 billion through a merger with a special purpose acquisition company.
BuzzFeed hopes the move will put it in a better position to capture lucrative digital ad dollars against much bigger rivals like Google, Facebook and Amazon.
The company, founded by Jonah Peretti in 2006 and initially known for listicles and online quizzes, has established itself as a serious contender in the news business, this year winning a Pulitzer for international reporting. Its other brands include Tasty, the world’s largest social food network.
It has been buying up competitors, including HuffPost, the media outlet founded in 2005 as The Huffington Post, from Verizon Media in November. BuzzFeed said on Thursday that it plans to buy Complex Networks from Verizon and Hearst for USD300 million. Complex is a global youth network that engages with millennials and Gen Z.
Digital advertising is a tough space to succeed in, and digital newsrooms have been consolidating, including Vox’s purchase of New York Magazine and its digital arms. Facebook and Google get the majority of digital-ad dollars. In a statement, Peretti said the acquisition of Complex would “open the door to even more revenue opportunities”.
A number of companies this year have chosen a non-traditional path to putting their shares on the public market, choosing to skip partnerships with traditional financial institutions, and instead merging with a special purpose acquisition company (SPAC).
SPACs can cut up to 75 per cent off the time it takes for a company to get its stock trading on an exchange, versus the traditional process of an initial public offering. SPACs can also make it easier to get prospective buyers on board.