Shareholders of BuzzFeed, a digital media pioneer known for its listings, quizzes and news department that won its first Pulitzer Prize this year, voted Thursday to go public.
The deal, which will bring BuzzFeed to the stock market, raised less money than originally expected, which could lower the company’s costs in coming years and force it to curb its ambitions.
The long-term plan, spearheaded by BuzzFeed co-founder and CEO John Peretti, includes a merger with a specialist company to acquire 890 5th Avenue Partners. The so-called SPACs raise money through an initial public offering and use that money to buy a private company.
The deal is expected to close by Friday, 890 5th Avenue Partners said in a statement. BuzzFeed will debut on the stock market on Monday under the ticker BZFD. Part of the deal includes the completion of the $ 300 million acquisition of BuzzFeed of Complex Networks, a sports and entertainment publisher.
Since the investors who buy SPAC do not know which company they are planning to buy, they have the option to buy back those shares at the IPO price – in this case, $ 10 – before it reaches any deal. Many did so. BuzzFeed could have raised over $ 250 million from investors in SPAC, but it ended up only raising $ 16 million, according to a press release from BuzzFeed and 890. But BuzzFeed will receive $ 150 million from the sale of debt securities. Other SPAC deals have been hit in recent weeks by shareholders asking for their money back.
As shareholders cast their votes, the move that could mean millions of dollars for early investors and some current and former employees was not welcomed by everyone at the company: Union employees in its news department, BuzzFeed News, took the job for the day. a stop to expedite contract negotiations. The union said it was attended by all 61 staff members of the BuzzFeed News union, which includes reporters, editors and designers.
In a statement, the union accused the company of refusing to budge in contract negotiations. The main stumbling block is payment. The union said BuzzFeed offers a guaranteed 1 percent pay increase per year and a $ 50,000 minimum wage.
“We deserve a strong contract that protects us and provides a fair and equal workplace for everyone in our unit,” Katie Notopoulos, senior technical reporter, said in a statement.
A BuzzFeed spokesman said the company will return to the negotiating table “next Tuesday where we hope the union will provide an answer to these questions.”
The union, formed in February 2019, is represented by NewsGuild, which also represents The New York Times and other media workers. The union and the company have not yet agreed on the first contract.
BuzzFeed was launched in a small office in New York City’s Chinatown in 2006 as a viral media pilot for Mr. Peretti while he was serving as CTO at The Huffington Post. He dedicated his full time to BuzzFeed in 2011 after AOL bought HuffPost for $ 315 million and transformed it into an autonomous media company with the help of $ 35 million from investors.
It was soon hailed as the future of the media. However, the company has fallen short of its revenue targets in recent years and some investors have pushed for a sale. BuzzFeed went big last year when it acquired HuffPost from its last owner, Verizon, in a stock deal.