Deal: Vox Media Buys Thrillist Publisher Group Nine
There’s a big new deal in the digital media sphere. Vox Media, the owner of popular editorial outlets including The Verge, SB Nation, and New York Magazine, is buying Group Nine, the owner of popular digital media assets including Thrillist, NowThis, and The Dodo. It’s a landmark deal combining two big names in the digital media sphere into one.
- Vox didn’t disclose the financial terms of the deal. However, the Wall Street Journal says it’s an all-stock merger wherein Vox Media contributes 75% of the value and Group Nine 25%. Jim Bankoff, the CEO of Vox Media, will head the combined company.
The merger announcement came shortly after BuzzFeed’s lacklustre debut on the public markets through a special-purpose acquisition company (SPAC) merger. Other digital media companies were closely watching BuzzFeed’s debut to judge the public market sentiment for digital media companies.
Given the gloomy sentiment, it makes sense that two media companies considered independent SPAC merger candidates are merging into one. A strengthened company would be more favourable to investors. In fact, Group Nine already debuted a SPAC “Group Nine Acquisition Corp (NASDAQ: GNAC)” that raised $230mn from investors early this year. The combined Vox Media-Group Nine is the likely merger target for the latter’s SPAC, but there’s no confirmation at this point.
- According to the Wall Street Journal, the combined company is expected to generate $700mn in revenue and $100mn in profits in 2022. That’s higher than BuzzFeed (NASDAQ: BZFD), which projects it’ll generate around $650mn in revenue in 2022, compared to $520mn this year.
- Group Nine had reportedly held merger talks with BuzzFeed and Vox “for years” in a bid to scale and compete for ad dollars with Google and Facebook. It’s now official that Vox was the successful merger candidate.
Vox Media is a digital media conglomerate tracing its origins to SB Nation, a sports blog founded in 2005. Building on SB Nation’s success, a parent company “Vox Media” was formed by former AOL executive Jim Bankoff to expand into other verticals. Bankoff has been very successful at expanding Vox Media by launching new sites or making acquisitions. Under his leadership, Vox Media has raised over $300mn from VCs.
Similarly, Group Nine was formed in 2016 as a parent company to a collection of media properties founded by the Lerer family, a digital media royalty. Kenneth Lerer, who helped form Group Nine, was the former Chairman of BuzzFeed and a co-founder of HuffPost (now owned by BuzzFeed). His son, Ben Lerer, is Group Nine’s CEO. Group Nine has raised nearly $200mn in venture funding, and its biggest investor is media giant Discovery (NASDAQ: DISCA).
- Combined, Vox Media and Group Nine will be a powerhouse in the digital media scene encompassing editorial and news sites, events, newsletters, podcasts, commerce, and content creation for streaming services like Netflix and Hulu. Together, they’ll have well over 1,000 employees.
- The merger is expected to close early next year.
Photo: Jim Bankoff. Credit: Gabriel Cristóver Pérez/Knight Center, licensed under CC BY 2.0