NEW YORK (BLOOMBERG) – BuzzFeed, the digital-media outlet founded in 2006, is in talks to go public through a merger with 890 5th Avenue Partners, a special purpose acquisition company (Spac), according to people with knowledge of the matter.
Once public, the company may use its currency to target future acquisitions, said one of the people, who requested anonymity because the talks are private. A transaction value couldn’t immediately be learned. As with any deal that hasn’t been finalized, it’s possible terms change or talks fall apart.
890 5th Avenue – named after the fictional Avengers mansion – is led by executive chairman Adam Rothstein and CEO Emiliano Calemzuk. The blank-cheque firm raised US$287.5 million (S$386.5 million) in a January initial public offering and has said it’s focused on technology, media and telecommunications.
Representatives of BuzzFeed and 890 5th Avenue didn’t immediately respond to requests for comment.
The deal talks follow a tumultuous year for BuzzFeed, which laid off employees during the pandemic and lost revenue from advertising and live events. The company’s balance sheet had improved by last November, when it agreed to buy the HuffPost online news service from Verizon Communications Inc. But now it’s undergoing another round of layoffs as it pares some staffers from that acquisition.
As part of the HuffPost deal, Verizon acquired a minority stake in BuzzFeed that valued the company at about US$1.7 billion. That’s roughly the same as BuzzFeed’s valuation in 2016, when Comcast Corp’s NBCUniversal invested US$200 million in the business, a person with knowledge of the matter said at the time.
The New York-based company was founded by chief executive officer Jonah Peretti, who previously helped start HuffPost.
Earlier this week, HuffPost reported that 47 US employees would be cut in a bid to make the division profitable. The business lost about US$20 million last year, Peretti told staffers. A union representing HuffPost workers said it was “devastated and infuriated” – particularly as it happened less than a month after the acquisition by BuzzFeed was completed.
“We never got a fair shot to prove our worth,” the union said in a statement.