Digital media outfit BuzzFeed announced today that it will go public via a SPAC, or blank check company. BuzzFeed also disclosed that it will purchase Complex, another media company, for $300 million in cash and shares in BuzzFeed itself; the SPAC deal will help finance its purchase of Complex.
The transaction will see BuzzFeed merge with 890 Fifth Avenue Partners Inc., a public company, with the combined entity sporting an enterprise valuation of around $1.5 billion after its completion. BuzzFeed’s SPAC partner is bringing $288 million in cash to the table, and BuzzFeed intends to raise another $150 million in a convertible debt offering.<div class="article-block block--pullout block--right">
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In raw numbers, BuzzFeed is a large company with hundreds of millions of dollars in yearly revenue and a roughly break-even business in recent years. </blockquote>
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In raw numbers, BuzzFeed is a large company with hundreds of millions of dollars in yearly revenue and a roughly break-even business in recent years. The company’s investor presentation anticipates a return to growth after a mostly flat 2020, and rising profitability over time.
So let’s get into the company’s investor presentation. We want to know about its historical growth, anticipated growth, revenue mix and profitability, as well as how the company thinks about its news division. Let’s go!
I’ve broken each of our points into its own minisection, so if you want to skate ahead to any particular point, feel free!
Historical revenue growth
Why is BuzzFeed buying Complex? In part, because it adds audience scale to its platform, a key to the company’s expected future advertising revenue growth (more on that in a moment). But also because Complex adds a lot of revenue to its overall top-line picture. For example, in BuzzFeed’s historical revenue figures we see the following numbers:- 2019: $425 million.
- 2020: $421 million.