BuzzFeed Inc will go public through a merger with blank-check company 890 fifth Avenue Partners Inc, named after the fictional Avengers mansion, in a deal valuing the online media outlet at $1.5 billion.
The deal includes a $150 million convertible note financing led by Redwood Capital Management, with participation from institutional investors including CrossingBridge Advisors, Cohanzick Management and Silver Rock Financial LP.
BuzzFeed was valued at $1.7 billion in 2016, when Comcast Corp’s NBCUniversal invested $200 million in the media firm.
The deal is expected to close in the fourth quarter of 2021. As part of the transaction, BuzzFeed said it plans to buy Complex Networks, a youth entertainment company from Hearst and Verizon, for $300 million.
In November, BuzzFeed bought news website HuffPost from Verizon Communications Inc for an undisclosed amount.
BuzzFeed, founded by Jonah Peretti in 2006 in New York’s Chinatown, portfolio also includes BuzzFeed News and food network Tasty.
BofA Securities is acting as financial adviser to BuzzFeed on the deal, while Cowen is acting as financial and capital markets adviser, and lead placement agent for 890 Fifth Avenue Partners.
Special purpose acquisition vehicles, or SPACs, are shell companies that raise funds through an initial public offering to take a private company public through a merger at a later date.
890 Fifth Avenue Partners raised $287.5 million in its IPO in January this year, including the underwriters’ option.
Adam Rothstein, co-founder of Israel-based venture capital firm Disruptive Technology Partners, is the executive chairman at 890 Fifth Avenue Partners, while Emiliano Calemzuk is CEO.
Calemzuk co-founded RAZE along with actress Sofia Vergara and media veteran Luis Balaguer. The Los Angeles-based media venture makes content with a focus on Hispanic and Latin American audience.
BuzzFeed will be listed on a public exchange under the ticker symbol “BZFD”.