Group Nine, fresh off a new $50 million round of funding, decided to add to its portfolio of brands.
The media company, which already operates sites such as Thrillist and NowThis, acquired PopSugar, a web site that offers fashion and celebrity coverage aimed at women, but also shopping and extensive branding and licensing efforts of its own and for advertising partners. A spokeswoman for Group Nine declined to comment on the value of the deal, but it was an all-stock transaction. Reporting in The Wall Street Journal said PopSugar was valued at $300 million.
That valuation is half that of Group Nine, which is said to be worth $600 million based on its recent funding round, led by Discovery Inc., already its largest investor, and Axel Springer.
Ben Lerer, Group Nine’s chief executive officer, said the acquisition of PopSugar “hugely expands our reach within an important demographic, bringing us a community that deeply loves the brand and a company with the proven ability to diversify their revenue across premium advertising, affiliate, direct-to-consumer commerce, licensing and experiential channels.”
Noting the current rate of consolidation in digital media — with Vice just buying Refinery29 in an all-stock deal and Vox buying storied New York Magazine in similar fashion — Lerer said his company “foresaw the impending consolidation of the industry and set out to create a model for the next-generation media company with significant scale, deeply loyal and engaged audiences, multiplatform expertise and highly diversified revenue.”
As for PopSugar’s founders, Lisa and Brian Sugar, they will take on new executive roles with Group Nine, though the spokeswoman said their titles won’t be revealed until the transaction closes in a little over a month. Brian Sugar will take a place on the company’s board.
Lisa Sugar pointed to PopSugar’s many extensions into commerce and events as making her company a good fit with Group Nine, adding the two also “share a similar passionate connection with their audiences as well as an ethos of optimism and action that truly excites me.”
“Over the last few years, we’ve gotten PopSugar to profitability and found a way to build a well-diversified business that has outlasted many of our competitors in a rapidly evolving space,” Brian Sugar said. “Joining forces with a company and team that has the ambition, momentum and market leadership of Group Nine, combined with our experience and innovation in commerce and experiential, will allow us to build a scalable business model that sets the standard for the next-generation media company.”
As for PopSugar’s employees, which number around 500, many of the executives are set to be integrated into the Group Nine organization, according to the spokeswoman. As for the other employees, she said the company “will, of course, look at cost efficiencies when it comes to infrastructure.” She did note, however, that when looking at the two companies, “the lack of overlap is pretty remarkable and it’s one of the reasons why the acquisition made so much sense.”
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