Forbes is the latest media company jumping aboard the SPACs train.
It has joined forces with Magnum Opus Acquisition Ltd., a Special Purpose Acquisition Company, to go public in a deal worth $630 million. SPACs, also known as “blank check” entities, act as a shell company that investors pour money into via an initial public offering. They then use those funds to acquire a company that will inherit its stock exchange listing minus the traditional time-consuming IPO process.
While they have been around for a while, media’s interest in them only really took off in 2020 as the pandemic hit the sector hard, making consolidation, especially on the digital side, an increasingly attractive option. Companies slashing marketing budgets, more ads being swallowed up by Facebook and Google and venture capitalist investors’ waning interest in digital media have all played a part.
Other media companies to have gone down the SPACs route in one form or another include BuzzFeed, Group Nine, Bustle Digital Group and Playboy. Joanna Coles, Hearst Magazines’ former chief content officer and Cosmopolitan’s ex-editor in chief, also teamed up last year with New York Islanders owner Jon Ledecky for a SPAC, North Star Acquisition Corp., which raised $250 million in a November public offering. Its prospectus said it was targeting companies in the beauty, wellness, self care, fashion, e-commerce, subscription and digital media spaces and the following month it revealed it was merging with Barkbox, a subscription service for dog owners.
In the case of Forbes, the transaction is expected to close in late fourth quarter 2021 or early first quarter 2022 and will enable Forbes to further capitalize on its successful digital transformation, using technology and data-driven insights to create more deeply engaged audiences, and associated high-quality and recurring revenue streams. It will be listed on the New York Stock Exchange under the ticker symbol FRBS.
Forbes’ existing management team will continue to manage the combined company upon completion of the transaction under the leadership of chief executive officer Mike Federle.
“Leveraging our iconic global brand, Forbes has been executing a data-led platform strategy and is fast becoming the gateway for businesses, entrepreneurs and consumers to join the conversations and participate in the trends that are shaping the world today,” Federle said. “With this transition into a publicly traded company, Forbes will have the capital to accelerate growth by executing its differentiated content and platform strategy and fully realize the potential of our iconic brand.”
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